If you put a $20 bill in the pocket of your winter coat at the beginning of spring so that you will be surprised when you find it again next winter, you are using money as:
A. bank reserves.
B. a medium of exchange.
C. a store of value.
D. a unit of account.
Answer: C
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The time lags, which must be either reduced or known with some precision if fiscal policy is to be an effective stabilizing technique, are the lags between
A) the beginning of a cyclical movement and its recognition. B) the decision that compensatory action should be taken and the enactment of tax or expenditure changes. C) the increase or decrease in net government receipts and their final effects on total spending. D) all of the above, because a significant miscalculation with respect to any of these lags could increase aggregate instability.
Which term is used to describe equilibrium at a level of output above potential GDP?
a. Recessionary gap b. Inflationary gap c. Deflationary gap d. Keynesian gap
Which of the following changes will be observed in the labor market of a country that follows strict population control measures?
a. The labor supply curve will shift to the right. b. The labor demand curve will shift to the right. c. The labor supply curve will shift to the left. d. The labor demand curve will become flatter.
Which of the following describes a situation in which demand must be inelastic?
a. Total revenue decreases by 10 percent when the price of jeans rises by 10 percent. b. Total revenue decreases by less than 10 percent when the price of jeans rises by 10 percent. c. Total revenue increases by more than 10 percent when the price of jeans rises by 10 percent. d. Total revenue decreases by $10 when the price of jeans rises by $10. e. Total revenue decreases by more than $10 when the price of jeans rises by $10.