21) Two consequences of asymmetric information are adverse selection and moral hazard. An important distinction between the two is A) adverse selection exists prior to the completion of a transaction while moral hazard occurs after the transaction is completed. B) moral hazard exists prior to the completion of a transaction while adverse selection occurs after the transaction is completed. C) adverse selection leads […]

    51) If the economy moves upward along its short-run Phillips curve, in the AS-AD diagram, this movement is shown by a A) movement upward along the AS curve as a result of a rightward shift of the AD curve. B) rightward shift of potential GDP. C) movement downward along the AS curve as a result of a leftward shift of the AD curve. […]

  101. Which of the following statements about kaizen is false?  A. Employee empowerment will allow kaizen to occur more easily. B. It requires active participation by all of a company’s employees. C. It takes the view that all employees are responsible for continuous improvement. D. It consists of major changes that require large investments on the part of the company.   102. Which of the following statements regarding “quality” is […]

  61) Which of the following is an example of a normative economic statement? A) Universal access to quality health insurance is the most important domestic policy issue of our time. B) Extending the time in which laid-off workers are eligible to receive government unemployment compensation has increased the unemployment rate. C) Lowering marginal income tax rates depresses consumer spending. D) Prices rise when the […]

  Multiple Choice 32.The stage of development in which most of the group’s substantive work is accomplished is the _____ stage. a.forming b.storming c.norming d.performing (page 106, easy) 33.Three cultural variables that could affect the models of group development include all of the following, except _____. a.power distance b.uncertainty avoidance (page 107, moderate) c.individualism-collectivism d.time orientation 34.A _____ can affect groups by producing a highly […]

  61) Commercial banks hold a fraction of their deposits in cash in their vaults (or as deposits with the central bank). This fraction is known as A) the required reserve. B) the excess reserve ratio. C) the fractional reserve. D) the reserve ratio. E) the target reserve. 62) The Canadian banking system is a A) gold-reserve system. B) fractional-reserve system. C) target-reserve system. D) […]

  1) Macroeconomics is mainly concerned with the study of A) individual households and how they deal with problems like inflation and unemployment. B) large economic units such as General Motors or Molson Breweries. C) fluctuations and trends in disaggregated data. D) fluctuations and trends in aggregated data. E) governments and their intervention in individual markets. 2) The economic problems studied in macroeconomics include: 1) […]

  31.GAwindfarminIowabuysalargeturbinegeneratorfromaSwedish-ownedfactorylocatedinConnecticutthatusesworkerswholiveinConnecticut.Asaresult, a.U.S.investment,GDP,andGNPallincreasebythesameamount. b.U.S.investmentincreases,butGDPandGNPareunaffectedbythepurchase. c.U.S.investmentandGDPincreasebythesameamount,butU.S.GNPincreasesbyasmalleramount. d.U.S.investmentandGNPincreasebythesameamount,butU.S.GDPincreasesbyasmalleramount. 32.Thevalueofgoodsaddedtoafirm’sinventoryinacertainyearistreatedas a.consumption,sincethegoodswillbesoldtoconsumersinanotherperiod. b.intermediategoods,andsoisnotincludedinthatyear’sGDP. c.investment,sinceGDPaimstomeasurethevalueoftheeconomy’sproductionthatyear. d.spendingondurablegoods,sincethegoodscouldnotbeinventoriedunlesstheyweredurable. 33.onsumergoodsthatareproduced,gointoinventory,andarenotsoldduringthecurrentperiodare a.countedasintermediategoodsandsoarenotincludedincurrentperiodGDP. b.countedincurrentperiodGDPonlyifthefirmthatproducedthemsellsthemtoanotherfirm. c.includedincurrentperiodGDPasinventoryinvestment. d.includedincurrentperiodGDPasconsumption. 34.Duringthecurrentquarter,afirmproducesconsumergoodsandaddssomeofthosegoodstoitsinventoryratherthansellingthem.Thevalueofthegoodsaddedtoinventoryis a.notincludedinthecurrentquarterGDP. b.includedinthecurrentquarterGDPasinvestment. c.includedinthecurrentquarterGDPasconsumption. d.includedinthecurrentquarterGDPasastatisticaldiscrepancy. 35.Duringthethirdquarterofthisyearafirmproducesconsumergoodsandaddssomeofthosegoodstoitsinventory.Duringthefourthquarterofthisyear,thefirmsellsthegoodsataretailoutlet,withtheresultthatthevalueofitsinventoryattheendofthefourthquarterissmallerthanthevalueofitsinventoryattheendofthethirdquarter.Theseactionsaffectwhichcomponent(s)offourth-quarterGDP? a.theyincreaseconsumptionandhavenoeffectoninvestment b.theyincreaseconsumptionanddecreaseinvestment c.theyhavenoeffectoneitherconsumptionorinvestment d.theyhavenoeffectonconsumptionanddecreaseinvestment 36.Amanufacturerproduces1milliontelevisionsinthefirstquarteroftheyear.Itsells900,000ofthembeforetheendofthefirstquarter,andholdstheothersinitswarehouse.Howwillthe100,000unsoldtelevisionsbetreatedintheGDPstatistics? a.Sincethetelevisionseventuallywillbeboughtbyconsumers,theywillbeincludedasconsumptioninthefirstquarter. b.Sincethetelevisionswerenotpurchasedinthefirstquarter,theywillbecountedasanincreaseinsecond-quarterGDP. c.Thetelevisionswillbecountedasachangeininventoryinthefirstquarterandsowillbeincludedinfirst-quarterGDP. d.Thetelevisionswillbecountedasachangeininventoryinthefirstquarter,andwhensoldinthesecondquarterwillraisesecond-quarterGDP. 37.Thelocalcardealershiphasanincreaseininventoryof100newlyproducedcarsin2015.In2016,itsellsall100cars.Whichofthefollowingstatementsiscorrect? a.Thevalueofthecarsininventorywillbecountedaspartof2015GDP,andthevalueofthecarssoldin2016willnotincrease2016GDP. b.Thevalueofthecarsininventorywillnotaffect2015GDP,andthevalueofthecarssoldin2016willincrease2016GDP. c.Thevalueofthecarsininventorywillbecountedaspartof2015GDP,andthevalueofthecarssoldin2016willincrease2016GDP. d.Thevalueofthecarsininventorywillnotaffect2015GDP,andthevalueofthecarssoldin2016willnotincrease2016GDP. 38.AU.S.firmproducesnailgunsinthefirstquarterof2010andaddsthemtoitsinventory.Inthesecondquarterof2010thefirmsellsthenailgunstoaU.S.constructioncompany.Inwhichquarter(s)does(do)thesetransactionsraiseinvestment? a.thefirstandthesecond b.thefirstbutnotthesecond c.thesecondbutnotthefirst d.neitherthefirstnorthesecond 39.AU.S.firmproducesnailgunsinthefirstquarterof2010andaddsthemtoitsinventory.Inthesecondquarterof2010thefirmsellsthenailgunstoaU.S.constructioncompany.Inwhichquarter(s)is(are)GDPhigher? a.thefirstandthesecond b.thefirstbutnotthesecond c.thesecondbutnotthefirst d.neitherthefirstnorthesecond 40.AU.S.firmproducessweatshirtsinthefirstquarterof2010andaddsthemtoitsinventory.Inthesecondquarterof2010thefirmsellsthesweatshirtstoconsumers.Inwhichquarter(s)does(do)thesetransactionsraiseconsumption? a.thefirstandthesecond b.thefirstbutnotthesecond c.thesecondbutnotthefirst d.neitherthefirstnorthesecond    

  Figure 2-9     126) Refer to Figure 2-9.  Carlos Vanya grows tomatoes and strawberries on his land. His land is equally suited for growing either fruit. Which of the graphs in Figure 2-3 represents his production possibilities frontier? A) Graph A B) Graph B C) Graph C D) either Graph A or Graph B E) either Graph B or Graph C     […]

  61) The demand curve for a variable factor is always A) that factor’s marginal cost curve. B) that factor’s MRP curve. C) that factor’s MP curve. D) steeper than that factor’s MRP curve. E) flatter than that factor’s MRP curve. 62) In a perfectly competitive labour market, a profit-maximizing firm will employ labour until the A) MPP = MRP. B) wage = MP. C) […]