101. When large firms file for bankruptcy, they usually do so under an arrangement called:  A. Chapter 9. B. Chapter 11. C. Chapter 13. D. Chapter 14. 102. In a world with corporate taxes but no possibility of financial distress, the value of the firm is maximized when the:  A. firm uses no debt in its capital structure. B. firm uses no equity in its capital structure. C. firm uses a debt-equity […]

  61.Considerthefollowingthreeitemsofspendingbythegovernment:(i)thefederalgovernmentpaysa$500unemploymentbenefittoanunemployedperson;(ii)thefederalgovernmentmakesa$2,000salarypaymenttoaNavylieutenant;(iii)thecityofBozeman,Montanamakesa$10,000paymenttoABCLightingCompanyforstreetlightsinBozeman.Whichofthesepaymentscontributesdirectlytogovernmentpurchasesinthenationalincomeaccounts? a.onlyitem(i) b.onlyitem(ii) c.onlyitems(i)and (ii) d.onlyitems(ii)and(iii) 62.WhichofthefollowingsubcomponentsofGDPcanbeeitherpositiveornegative? a.inventoryinvestment b.exports c.governmentpurchases d.Alloftheabovearecorrect. 63.Netexportsequal a.exportsplusimports. b.exportsminusimports. c.importsminusexports. d.GDPminusimports. 64.Netexportsequal a.exportsplusimports. b.importsminusexports. c.Y-(C+I+G). d.Y-(C-I-G). 65.Ifnetexportsisanegativenumberforaparticularyear,then a.thevalueoffirms’inventoriesdeclinedoverthecourseoftheyear. b.consumptionexceededthesumofinvestmentandgovernmentpurchasesduringtheyear. c.thevalueofgoodssoldtoforeignersexceededthevalueofforeigngoodspurchasedduringtheyear. d.thevalueofforeigngoodspurchasedexceededthevalueofgoodssoldtoforeignersduringtheyear. 66.IfaU.S.citizenbuysatelevisionmadeinKoreabyaKoreanfirm,then a.U.S.netexportsdecreaseandU.S.GDPdecreases. b.U.S.netexportsareunaffectedandU.S.GDPdecreases. c.U.S.netexportsareunaffectedandU.S.GDPisunaffected. d.U.S.netexportsdecreaseandU.S.GDPisunaffected. 67.AU.S.grocerychainpurchasesoliveoilfromTunisiaandsellsittoU.S.consumers.In which ofthe following isthistransactionincluded? a.U.S.consumptionandU.S.imports b.U.S.consumptionbutnotU.S.imports c.U.S.importsbutnotU.S.consumption d.neitherU.S.consumptionnorU.S.imports 68.WhenaU.S.citizenbuys$500ofChinese-madepartsforamotorcycle, a.U.S.consumptionfallsby$500,U.S.netexportsdeclineby$500,andU.S.GDPdeclinesby$1000. b.U.S.consumptiondoesnotchange,U.S.netexportsdeclineby$500,andU.S.GDPdeclinesby$500. c.U.S.consumptionincreasesby$500,U.S.netexportsremainthesame,andU.S.GDPincreasesby$500. d.U.S.consumptionincreasesby$500,U.S.netexportsdeclineby$500,andU.S.GDPremainsthesame. 69.IfaU.S.companybuysanelectricalgeneratormadeinJapanbyaJapanesefirm,andtheJapanesefirmusesthepaymenttobuystocksissuedbyaU.S.companythen a.U.S.exportsandU.Simportsincrease. b.U.S.exportsbutnotU.S.importsincrease. c.U.S.importsbutnotU.S.exportsincrease. d.neitherU.S.exportsnorU.S.importsincrease. 70.AGermancitizenbuysanautomobileproducedintheUnitedStatesbyaJapanesecompany.Asaresult, a.U.S.netexportsincrease,U.S.GDPisunaffected,JapaneseGNPincreases,Germannetexportsdecrease,andGermanGNPandGDPareunaffected. b.U.S.netexportsandGDPincrease,JapaneseGNPincreases,Germannetexportsdecrease,GermanGNPisunaffected,andGermanGDPdecreases. c.U.S.netexportsandGDPincrease,JapaneseGNPincreases,Germannetexportsdecrease,andGermanGNPandGDPareunaffected. d.U.S.netexportsandGDPareunaffected,JapaneseGNPincreases,andGermannetexports,GNP,andGDPdecrease.    

    41) The total output produced by a firm divided by the quantity of workers employed by the firm is the definition of A) the marginal product of labor. B) the division of labor. C) the average product of labor. D) the average cost of production.   42) After Suzie, owner of Suzie’s Sweet Shop, hires her 8th worker the average product of labor […]

  21) The new growth theory asserts that profits are A) permanent, because they are derived from discoveries. B) temporary, because the discoveries that lead to profits are eventually used by all. C) an illusion, since costs are never fully covered. D) permanent, because physical activities can be replicated. E) not an essential component determining whether the economy grows or not. 22) The new growth […]

  Table 4-4   Hourly Wage (dollars) Quantity of Labor Supplied Quantity of Labor Demanded $8.00 350,000 390,000   8.50 360,000 380,000   9.00 370,000 370,000   9.50 380,000 360,000 10.00 390,000 350,000 10.50 400,000 340,000   Table 4-4 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.     11) Refer to Table 4-4.  If a minimum […]

    21) Production efficiency occurs A) anywhere inside or on the production possibilities frontier. B) when the total cost of production is minimized. C) at all points on the production possibilities frontier. D) at only one point on the production possibilities frontier. E) at all points inside the production possibilities frontier.   22) When production efficiency does NOT occur, i.an economy is producing at […]

    88) A voluntary export restraint is an agreement negotiated by two countries that places ________ that can be imported by one country from another country. A) a tax on goods B) a minimum quantity of a good C) quality standards on goods D) a numerical limit on the quantity of a good   89) In the 1980s Japan agreed to limit the quantity […]

  121) When the production of a good has a marginal external cost, which of the following occurs in an unregulated market? i.Overproduction relative to the efficient level will occur. ii.The market price is less than the marginal social cost at the equilibrium quantity. iii.A deadweight loss occurs. A) i only B) ii only C) iii only D) i and ii E) i, ii, and […]

18.1   Intervention in the Foreign Exchange Market   1) A central bank ________ of domestic currency and corresponding ________ of foreign assets in the foreign exchange market leads to an equal decline in its international reserves and the monetary base, everything else held constant. A) sale; purchase B) sale; sale C) purchase; sale D) purchase; purchase   2) A central bank ________ of domestic currency […]

    41.Characterize EACH of the three given statements as being TRUE or FALSE and then indicate the collective true-false status of the statements using the choices: (1) In a radioactive decay process, the parent nuclide is always unstable and the daughter nuclide is always stable. (2) A free radical is a highly reactive piece of a molecule that contains an unpaired electron. (3) An […]