Per capita real GDP is obtained by dividing real GDP by the number of people active in the labor force.
a. True
b. False
Indicate whether the statement is true or false
Question 2If the government increases its efforts to reduce illegal drugs which of the following would explain the possible unintended consequencesan increase in drug-related crimes.
a. More people will commit crimes as a result of the increased drug use.
b. Tough drug enforcement policies reduce the demand for illegal drugs.
c. Drug addicts will have an even greater need for quick cash to support their habits.
d. In the short run, both equilibrium quantities and prices will fall in the markets for illegal drugs.
Question 3Real GDP can rise at the same time money supply falls if:
a. velocity rises rapidly enough.
b. velocity falls rapidly enough.
c. the price level rises rapidly enough.
d. either b. or c. occurs.
Question 4When you are calculating how long it will take your initial bank deposit to double, the rule of 72 prescribes that you divide the annual interest rate paid on the deposit by 72.
a. True
b. False
Indicate whether the statement is true or false
Question 5If marijuana were legalized, it is likely that there would be an increase in the supply of marijuana. Those in favor of legalizing marijuana argue that this would generate less revenue to illegal suppliers. The legalize marijuana proponents must believe the:
a. demand for marijuana is elastic.
b. demand for marijuana is inelastic.
c. demand for for marijuana is unit elastic.
d. none of the above.
Question 6An increase in the money supply and a decrease in real GDP at the same time is consistent with the equation of exchange if:
a. velocity rises rapidly enough.
b. velocity falls rapidly enough.
c. the nominal GDP rises rapidly enough.
d. the price level falls rapidly enough.
Question 7Based on the rule of 72, it would require 18 years for an economy to double its real output if the annual growth rate was 4.
a. True
b. False
Indicate whether the statement is true or false
Question 8A tax is imposed on orange juice. Consumers will bear no burden from this tax if the:
a. demand for orange juice is perfectly inelastic.
b. supply curve for orange juice is unit elastic.
c. demand for orange juice is unit elastic.
d. supply curve for orange juice is perfectly inelastic.
Question 9In the equation of exchange, velocity will tend to rise when:
a. the price level rises, other things being equal.
b. real GDP rises, other things being equal.
c. the money supply declines, other things being equal.
d. all of the above.
Question 10The rule of 72 is a formulation that allows us to know, in a very quick and simple manner, the approximate time it takes to double a number that grows at a constant rate.
a. True
b. False
Indicate whether the statement is true or false
Question 11If the government wanted a tax to not burden producers much, it would want to tax an industry with
a. elastic supply and demand curves.
b. inelastic supply and demand curves.
c. inelastic supply and elastic demand.
d. elastic supply and inelastic demand.
Question 12In the equation of exchange, an increase in M of 8 percent could be accompanied by changes in velocity, the price level and real GDP of:
a. -2, 3, 3.
b. 4, 0, 4.
c. 2, 8, 8.
d. 8, 8, 4.
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