11.When driving forces overcome restraining forces and a planned change actually takes place, change theorists describe it as a. equilibrium b. moving c. motivation d. inertia e. homeostasis 12.If a change becomes fully integrated into the status quo, it does so, according to change theorists, through a . synergism b . learning c. anomie d . training e. […]
23) In the figure above, a price of $35 per dozen roses results in A) a shortage. B) equilibrium. C) a surplus. D) upward pressure on the price of roses. E) an eventual rightward shift of the demand curve and/or leftward shift of the supply curve. 24) In the figure above, a price of $15 per dozen roses results in A) equilibrium. […]
51. When making a decision, which of the following should not be considered? A. Relevant costs B. Opportunity costs C. Sunk costs D. Risk 52. Which of the following is not true with regard to opportunity costs? A. They are the benefits forgone by selecting one alternative over another. B. They are relevant. C. They are sometimes difficult to quantify. D. They have already occurred in the past. 53. You are now considering your housing […]
31) Refer to Figure 2.1. The shape of Macroland’s production possibility frontier shows A) increasing opportunity costs. B) constant opportunity costs. C) decreasing opportunity costs. D) random opportunity costs. 32) The production possibility frontier is used to illustrate the concept of A) the laissez-faire economy. B) opportunity costs. C) equilibrium. D) aggregate demand. Refer to the information provided in Figure 2.2 below […]
72.Sunk costs: a.are irrelevant. b.should be considered when determining an investment’s relevant cash flows. c.are equal to the firm’s opportunity costs. d.all of the above. 73.Opportunity costs: a.are irrelevant. b.should be considered when determining an investment’s relevant cash flows. c.are equal to the firm’s sunk costs. d.all of the above. 74.To help rank projects in a capital […]
51) The Fed sells $300 million U.S. government securities to commercial banks. This action leads to ________ in Fed assets and ________ in Fed liabilities. A) a $300 million increase; a $300 million increase B) a $300 million increase; a $300 million decrease C) no change in Fed assets; no change in Fed liabilities D) a $300 million decrease; a $300 million decrease […]
13.5 Integrative Questions 1) An increase in the price level ________ the aggregate quantity supplied and ________ the aggregate quantity demanded. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) does not change; decreases 2) The ________, the ________ is the quantity of real GDP supplied and the ________ is the quantity of real GDP demanded. A) lower the price […]
31) Refer to Figure 8.9. At aggregate output level $100 million, there is a A) $75 million unplanned increase in inventories. B) $75 million unplanned decrease in inventories. C) $100 million decrease in inventories. D) $100 million increase in inventories. 32) Refer to Figure 8.9. How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result of a decrease in investment […]
11) How do advertising and other selling costs affect a firm? A) They shift the marginal cost curve upward. B) The only effect is that the excess capacity is reduced. C) The only effect is that the demand for the product increases. D) They shift the average total cost curve upward. E) They do not change demand and shift the average total cost curve […]
1.Which one of the following will result from receiving cash upon issuing long-term debt? a. Increase of the company’s indebtedness b. Decrease of the current ratio c. Increase of retained earnings d. Increase of total shareholders’ equity 2.If the maximum debt/equity ratio as specified by a debt covenant is close to being violated, which one of the following actions would increase the likelihood of […]
121.In the context of the 1997 Asian crisis, how did the International Monetary Fund's “one-size-fits-all” approach to macroeconomic policy affect South Korea?
A. It led to a decrease in the interest rates of short-term loans.
B. It made it difficult for companies to service their excessive short-term debt obligations.
C. It decreased the probability of widespread corporate defaults.
D. South Korea failed to recover from its financial crises.
E. South Korea was forced to increase restrictions on foreign direct investment.
122._____ arises when people behave recklessly because they know they will be saved if things go wrong.
A. Systemic risk
B. Moral hazard
C. Ethical dilemma
D. Tragedy of the commons
E. Risk compensation
123.Jade, a working professional, began driving rashly ever since she got her car insured against damage. She believed that the insurance claim would cover her in case of any accidents. Jade’s behavior is due to a situation known as _____.
A. cognitive dissonance
B. conflict of interest
C. systemic risk
D. moral hazard
E. tragedy of the commons
124.The International Monetary Fund been criticized for:
A. its lack of “one-size-fits-all” approach to macroeconomic policy.
B. encouraging moral hazard among banks.
C. its lack of power and authority.
D. using external experts to gain knowledge about a country.
E. keeping its operations open to outside scrutiny.
125.According to the critics of the International Monetary Fund (IMF), how should the problem of moral hazard exhibited by banks be resolved?
A. The IMF should use a “one-size-fits-all” approach to macroeconomic policy.
B. The IMF should establish a mechanism for accountability.
C. The IMF should free all banks from the obligation of financial reporting.
D. The banks should be forced to pay the price for their rash lending policies.
E. The IMF should bail out the banks whose loans gave rise to financial crises.
126.According to the noted economist Jeffrey Sachs, the International Monetary Fund should:
A. not be accountable to anyone as it is a powerful institution.
B. bail out the banks that have rash lending policies.
C. have a “one-size-fits-all” approach to macroeconomic policy.
D. keep its operations open to greater outside scrutiny.
E. lend only to countries with safe credit ratings.
127.The International Monetary Fund programs have been counterproductive, or only had limited success in _____.
A. Turkey
B. Iceland
C. Greece
D. Ireland
E. Latvia
128.In response to the global financial crisis of 2008–2009, the International Monetary Fund began to:
A. exercise tight controls on fiscal policy of the borrowing countries.
B. encourage activities that resulted in high inflation rates.
C. display inflexibility in policy responses.
D. urge countries to adopt policies that included fiscal stimulus and monetary easing.
E. adopt a “one-size-fits-all” approach to macroeconomic policy.
129.Which of the following observations about the International Monetary Fund (IMF) is true?
A. The IMF can force countries to adopt the policies required to correct economic mismanagement.
B. Internal political problems can affect a government's commitment to taking corrective action in return for an IMF loan.
C. In recent years, the IMF has begun to make its policies more tight and inflexible.
D. In response to the global financial crisis of 2008–2009, the IMF began to adopt a “one-size-fits-all” approach to macroeconomic policy.
E. In recent years, the IMF has begun to urge countries to oppose fiscal stimulus and monetary easing.
130.Which of the following poses a problem for international businesses in the long run?
A. Using exchange rate instruments like the forward market and swaps
B. Volatility of global exchange rate regime
C. Anti-inflationary monetary policies
D. Maintaining strategic flexibility by dispersing production to different locations
E. A policy of reduction in government spending
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