An increase in the real interest rate results in which of the following?
A) an increase in the demand for loanable funds
B) a decrease in the demand for loanable funds
C) an increase in the quantity of loanable funds supplied
D) Both B and C will occur as a result of an increase in the real interest rate.
Ques. 2For a given supply curve, the deadweight loss from the imposition of a tax is smaller if demand is more elastic.
Indicate whether the statement is true or false
Ques. 3In the 1960s, many economists and policymakers believed the trade-off between inflation and unemployment was permanent.
Indicate whether the statement is true or false
Ques. 4Ceteris paribus, an increase in the money supply will lower short-term interest rates.
Indicate whether the statement is true or false
Ques. 5Odd pricing became common in the late 19th century. Although the origins of odd pricing are uncertain, several explanations for the practice have been given. Which of the following is one of these explanations?
A) Odd pricing began in an era when it was difficult for owners and managers of firms to determine the marginal cost of the goods and services they sold. Odd prices were rough estimates designed to cover costs plus earn firms a profit.
B) Odd pricing was begun in England in the 1700s when America was part of the British Empire. Members of the British Royal Court were given the task of pricing products. After independence, merchants in the United States carried on the practice of odd pricing.
C) After the passage of the Sherman Act in 1890, merchants used odd pricing as a means of avoiding prosecution for antitrust violations.
D) Odd pricing forced employees to give customers change. This made it more likely that employees would record sales rather than pocketing their customers' money.
Ques. 6Using the market for loanable funds, which of the following has the potential to raise the real interest rate?
A) an increase in the supply of loanable funds
B) an increase in the quantity of loanable funds demanded
C) an increase in the quantity of loanable funds supplied
D) an increase in the demand for loanable funds
Ques. 7Assume that a comparable worth law is passed that determines that kindergarten teachers and bricklayers have comparable jobs; therefore, workers in both of these occupations should be paid the same wages.
Assume that prior to the law, bricklayers were paid a higher wage than kindergarten teachers. Which of the following is the most likely result of the comparable worth law?
A) There will be surplus in the market for bricklayers and a shortage in the market for kindergarten teachers.
B) Some former bricklayers will become kindergarten teachers and some former kindergarten teachers will become bricklayers.
C) The equilibrium wage will be the same for kindergarten teachers and bricklayers.
D) There will be a shortage in the market for bricklayers and a surplus in the market for kindergarten teachers.
Ques. 8The CPI is also referred to as
A) the inflation-consumption index. B) the producer price index.
C) the cost-of-living index. D) the GDP deflator.
Ques. 9Which of the following will reduce consumer expenditures?
A) a decrease in expected future income B) a decrease in interest rates
C) a decrease in the price level D) a general increase in housing prices
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