Households and firms pay taxes to the government to:
a. increase their consumption spending.
b. finance the country's import bill.
c. increase their savings.
d. improve their standard of living.
e. finance government expenditures.
QUESTION 2When a person's income doubles, her consumption of each good will double in order for her to stay in consumer equilibrium.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3Although the GATT was supported by most of the countries of the world, yet global trade shrank during the close of the last decade. This was due to:
a. growing suspicion among the nations of the world.
b. hyperinflation in the major economies of the world.
c. the recession which began in 2007.
d. political turmoil in the Asian countries.
e. the desire among the major players to dominate the international market.
QUESTION 4Which of the following is considered a financial intermediary?
a. The Federal Reserve
b. A bankruptcy court
c. The U.S. Department of Commerce
d. A credit union
e. A foreign exchange
QUESTION 5The total utility from consuming five muffins is 14, 24, 35, 43, and 50 utils, respectively. Marginal utility begins to diminish after consuming the first muffin.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6Delegates from different countries of the world met at Geneva in April 1947 which resulted in the formation of the first global trade agreement. Its main objective was:
a. to create multiple trade barriers in the member countries.
b. to enable the member countries to maintain their autarkic conditions.
c. to provide security to the domestic producers of the member countries by prohibiting international trade.
d. to create an atmosphere of economic rivalry in the international sphere.
e. to liberalize trade for mutual prosperity of the members.
QUESTION 7Financial intermediaries are best described as:
a. informal institutions that provide funds to the government to manage budget deficits.
b. institutions that accept deposits and make loans.
c. institutions that control the money supply in the economy.
d. institutions that provide financial aid to foreign countries.
e. individuals who manage other's investment portfolios.
QUESTION 8If total utility from consuming five cups of cocoa is 10, 22, 32, 41, and 49 utils, respectively, the marginal utility of the fourth cup of coffee is 9.
a. True
b. False
Indicate whether the statement is true or false
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