21) If an economy’s depreciation is greater than its gross investment, then A) net investment is positive and saving is negative. B) the economy’s capital stock decreases. C) net investment is positive and saving is positive. D) net investment is negative and saving is negative. E) net investment must equal saving. 22) The Zonamo company produces waste disposal machines and sells them to militaries […]

    21) Moving along the aggregate expenditure (AE) curve, when real GDP increases, aggregate planned expenditures increase A) by more than real GDP. B) by the same amount as does real GDP. C) by less than real GDP. D) proportionately with real GDP. E) by the same percentage as does real GDP. 22) Equilibrium expenditure occurs when A) aggregate planned expenditure equals real GDP. […]

  21) The value of marginal product of labor A) always increases as more labor is hired. B) is constant as long as each worker is paid the same wage rate. C) declines only if each worker is paid more than the previous worker. D) at some point declines as more workers are hired. E) at first decreases and then increases as more workers are […]

  41) If a consumer has allocated his or her budget and found the combination of goods where all marginal utilities divided by price are equal, what would happen if the consumer were forced to consume some other combination of goods? The consumer A) will definitely have higher total utility. B) will definitely have lower total utility. C) will definitely not experience any change in […]

  51. Jordan files his income tax return on a calendar-year basis. He is the principal partner of a partnership reporting on a June 30 fiscal year end basis. Jordan’s share of the partnership’s ordinary income was $24,000 for the fiscal year ended June 30, 2014, and $72,000 for the fiscal year ended June 30, 2015. How much should Jordan report on his 2014 individual income […]

    31) Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books? A) postage and supplies B) travel C) rent D) wages and salaries   32) Which of the following statements is false? A) An implicit cost is a nonmonetary opportunity cost. B) Economic costs include both accounting costs and implicit […]

  18.3   Fiscal Policy in the Dynamic Aggregate Demand and Aggregate Supply Model Figure 18-2     1) Refer to Figure 18-2.  In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely A) decrease government spending. B) […]

  181.Youcouldborrow$2,000todayfromBankAandrepaytheloan,withinterest,bypayingBankA$2,154oneyearfromtoday.Or,youcouldborrowXdollarstodayfromBankBandrepaytheloan,withinterest,bypayingBankB$2,477.10oneyearfromtoday.Inorderforthesameinterestratetoapplytothetwoloans,X= a.$2,300.00. b.$2,450.00. c.$2,500.00. d.$2,525.50. 182.Youcouldborrow$2,000todayfromBankAandrepaytheloan,withinterest,bypayingBankA$2,125oneyearfromtoday.Or,youcouldborrowXdollarstodayfromBankBandrepaytheloan,withinterest,bypayingBankB$2,200twoyearsfromtoday.Inorderforthesameinterestratetoapplytothetwoloans,X= a.$1,853.55. b.$1,898.70. c.$1,948.79. d.$2,012.22. 183.Supposeyouwinasmalllotteryandyouaregiventhefollowingchoice:Youcanreceive(1)animmediatepaymentof$5,000or(2)twoannualpayments,eachintheamountof$2,700,withthefirstpaymentcomingoneyearfromnow,andthesecondpaymentcomingtwoyearsfromnow.Youwouldchoosetotakethetwoannualpaymentsiftheinterestrateis a.2percent,butnotiftheinterestrateis3percent. b.3percent,butnotiftheinterestrateis4percent. c.4percent,butnotiftheinterestrateis5percent. d.5percent,butnotiftheinterestrateis6percent. 184.Supposeyouwinasmalllotteryandyouaregiventhefollowingchoice:Youcanreceive(1)animmediatepaymentof$10,000or(2)twoannualpayments,eachintheamountof$5,200,withthefirstpaymentcomingoneyearfromnow,andthesecondpaymentcomingtwoyearsfromnow.Youwouldchoosetotaketheimmediatepaymentof $10,000iftheinterestrateis a.2percent,butnotiftheinterestrateis1percent. b.3percent,butnotiftheinterestrateis2percent. c.4percent,butnotiftheinterestrateis3percent. d.5percent,butnotiftheinterestrateis4percent. 185.Ifyouput$400intoabankaccounttodayanditpromisestopay5%interestfor6years,howmuchisintheaccountattheendofthesixyears?                 186.Supposeyouwillreceive$800intwoyears.Iftheinterestrateis5percent,thenthepresentvalueofthisfuturepaymentis a.$725.62.Itwouldbehigheriftheinterestratewerehigher. b.$727.28.Itwouldbehigheriftheinterestratewerehigher. c.$725.62.Itwouldbeloweriftheinterestratewerehigher. d.$727.28.Itwouldbeloweriftheinterestratewerehigher. 187.Thepresentvalueofafuturepaymenttobereceivedinthreeyearsis$1,000.Iftheinterestrateis5%,whatistheamountthatwillbepaidinthreeyears? a.$1,150.00 b.$1,157.63 c.$1,215.51 d.$1,250.00 188.Acompanythatproducesbaseballglovesisconsideringbuyingsomenewequipmentthatitexpectswillincreasefutureprofits.Iftheinterestraterises,thenthepresentvalueofthesefutureprofits a.rises.Thecompanyismorelikelytobuytheequipment. b.rises.Thecompanyislesslikelytobuytheequipment. c.falls.Thecompanyismorelikelytobuytheequipment. d.falls.Thecompanyislesslikelytobuytheequipment. 189.Acompanythatproduceswallpaperisconsideringbuyingsomenewequipmentthatitexpectswillincreasefutureprofits.Iftheinterestratefalls,thenthepresentvalueofthesefutureearnings a.rises.Thecompanyismorelikelytobuytheequipment. b.rises.Thecompanyislesslikelytobuytheequipment. c.falls.Thecompanyismorelikelytobuytheequipment. d.falls.Thecompanyislesslikelytobuytheequipment. 190.Greg’sTastyIceCreamisconsideringbuildinganewicecreamfactorythatcosts$8.3million.Thecompanyaccountantsbelievethat,notaccountingforinterestcosts,buildingthefactorywillincreaseprofitsby$5millionthefirstyear,$4millionthesecondyearandhavenovaluethereafter.Greg’sTastyIceCreamshouldbuildthefactoryiftheinterestrateis a.3% but notif it is4%. b.4% but notif it is5%. c.5% but notif […]

    11) Labor productivity growth depends on i.saving and investment. ii.increases in human capital. iii.technological growth. A) i only B) ii only C) iii only D) Both ii and iii E) i, ii, and iii   12) Labor force productivity has increased from $30 per hour to $32 per hour over the past year. This could result from A) only an increase in real […]

    81) The Foreign Corruption Practices Act was initiated by: A) Wal-Mart underpaying child laborers in Honduras. B) Nike bribing the Indonesian government. C) a U.S. firm bribing the Honduran government. D) a Chinese firm complaining about toxic batteries.   Case 17.1 Hollar, Inc. is a U.S.-based, international car manufacturer with assembly facilities in 12 countries. Currently, expatriate managers and local national managers are […]