The equation of exchange states that the quantity of money
A) multiplied by the velocity of circulation equals nominal GDP.
B) divided by price level equals real GDP.
C) multiplied by nominal GDP equals the price level.
D) divided by nominal GDP equals real GDP.
Ques. 2According to
www.oecd.org, the United States spends a larger portion of expenditures on higher education compared to any other country. Increasing the amount of higher education produces
I. rightward shifts in the U.S. long-run aggregate supply curve.
II. movements up along the U.S. aggregate demand curve.
III. increases in U.S. human capital.
A) I and III only
B) I, II and III
C) II and III only
D) III only
Ques. 3In June 2008, 1 bought 104 yen and in October, 1 bought 93 yen. This change means
A) U.S. exports became more expensive for Japanese buyers.
B) there will be a movement down along the demand curve for dollars.
C) there was an increase in the value in the dollar, relative to the yen.
D) the dollar appreciated relative to the yen.
Ques. 4In the United States, the median household income is ________ than the mean income, which means there are ________ households with low incomes than with high incomes.
A) less; more
B) greater; more
C) greater; fewer
D) less; fewer
Ques. 5Suppose the price of soda is 2 each and the price of a pizza slice is 4 each. Jean maximizes utility and buys only sodas and slices of pizza. If the price of a soda increases to 3 each, Jean's marginal utility per soda
A) will increase and she'll buy more soda.
B) will decrease and she'll buy fewer sodas.
C) will decrease and she'll buy more pizza.
D) Both B and C are correct.
Ques. 6A budget line is drawn with automobiles on the vertical axis and boats on the horizontal. Imposing a tax on boats that boosts the price of a boat makes the
A) indifference curves flatter.
B) indifference curves steeper.
C) budget line flatter.
D) budget line steeper.
Ques. 7A person has a comparative advantage in an activity if that person can
A) produce more goods in a given amount of time than another person.
B) produce fewer goods in a given amount of time than another person.
C) perform the activity at a lower opportunity cost than anyone else.
D) perform that activity at a higher opportunity cost than anyone else.
Ques. 8For Product X, the income elasticity of demand is -2.56. Which of the following is therefore TRUE?
A) Product X is a necessity.
B) Product X is a luxury.
C) Product X is an inferior good.
D) Product X is a normal good.
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