101) An increase in the currency drain ratio A) decreases the quantity of money. B) decreases the monetary base. C) increases banks’ reserves. D) increases banks’ deposits. E) has no effect on the amount of the monetary base or the quantity of money.   102) ________ increases the size of the money multiplier. A) An increase in the currency drain ratio B) An […]

      45) The above figure shows the market for laptops. Which of the following causes a movement from A to B? A) a decrease in the number of laptop manufactures and sellers B) an increase in the productivity of the workers manufacturing laptops C) an increase in the cost of hard drives D) an increase in the price of laptops E) a decrease […]

  31.The amount that someone is willing to pay today, for a single cash flow in the future is a.the future value of the cash flow. b.the future value of the stream of cash flows. c.the present value of the cash flow. d.the present value of the annuity of cash flows 32.Pam is in need of cash right now and wants to sell the rights […]

Quantity of steel (millions of tons per week) Marginal benefit (dollars per ton) Marginal social cost (dollars per ton) 5 40 20 10 35 30 30 20 25 35 25 20 40 66) The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city. The market is efficient when the quantity of steel produced is […]

  19.1   The United States in the International Economy 1) U.S. firms that sell products in foreign markets protested the “Buy American” provision in the 2009 stimulus bill, arguing that if the United States restricted imports from foreign firms, A) foreign countries would likely retaliate by limiting U.S. exports. B) foreign firms would stop selling all products in the United States. C) U.S. firms would […]

  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 […]

  11) Which of the following is an example of a positive externality? A) banning the sale of candy in elementary schools B) planting trees along a sidewalk which add beauty and creates shade C) forbidding the use of cell phones in public D) prohibit street parking in all residential neighborhoods 12) A positive externality causes A) the marginal social benefit to be equal to […]

    9.7   Does Inflation Impose Costs on the Economy?   1) Suppose that in 2014, all prices in the economy double and that all wages and salaries also double.  In 2014 you A) are worse off than you were in 2013 as you can no longer afford to buy as many goods and services. B) are better off than you were in 2013 as […]

    71) Since 1970, as a percent of GDP, M1 held has steadily decreased. Which of the following can account for this fact? A) Real GDP has increased since 1970. B) The price level has risen since 1970. C) Credit cards have become more widely available since 1970. D) The nominal interest rate has steadily risen since 1970. E) The nominal interest rate has […]

    31) What happens to the demand for loanable funds curve when the economy enters a recession? A) The demand for loanable funds curve shifts rightward because the real interest rate falls. B) The demand for loanable funds curve shifts leftward because the real interest rate falls. C) The demand for loanable funds curve shifts rightward because expected profit falls. D) The demand for […]