The U.S. dollar is a composite currency.
a. True
b. False
Indicate whether the statement is true or false
Question 2A more efficient process for refining oil into gasoline is developed. As a result, the market price of gasoline:
a. and the quantity of gasoline purchased both increase.
b. increases and the quantity of gasoline purchased falls.
c. decreases and the quantity of gasoline purchased rises.
d. decreases and the demand curve for gasoline shifts to the right.
Question 3An increase in government purchases or a decrease in taxes, other things being equal, will tend to:
a. increase interest rates and decrease investment.
b. increase interest rates and increase investment.
c. decrease interest rates and decrease investment.
d. decrease interest rates and increase investment.
Question 4Sales contracts between developed countries are usually written (invoiced) in the national currency of the exporter.
a. True
b. False
Indicate whether the statement is true or false
Question 5Ceteris paribus, if the price of jet fuel rose, what effect would it have on the market for air travel?
a. an increase in equilibrium price and an increase in equilibrium quantity.
b. an increase in equilibrium price and a decrease in equilibrium quantity.
c. a decrease in equilibrium price and an increase in equilibrium quantity.
d. a decrease in equilibrium price and a decrease in equilibrium quantity.
Question 6The multiplier will be smaller, other things being equal:
a. the smaller the fraction of each dollar earned that goes to taxes.
b. the larger the MPC.
c. the smaller the fraction of each dollar of disposable income that goes to saving.
d. None of the above are true.
Question 7If Julia deposits 2,000 (which she has until now kept in her closet as cash) in her savings account, then the M1 money supply will decrease.
a. True
b. False
Indicate whether the statement is true or false
Question 8Ceteris paribus, if the price of jet fuel fell, what effect would it have on the market for air travel?
a. an increase in equilibrium price and an increase in equilibrium quantity.
b. an increase in equilibrium price and a decrease in equilibrium quantity.
c. a decrease in equilibrium price and an increase in equilibrium quantity.
d. a decrease in equilibrium price and a decrease in equilibrium quantity.
Question 9The multiplier will be greater, other things being equal:
a. the smaller the fraction of each dollar earned that goes to taxes.
b. the larger the MPC.
c. the smaller the fraction of each dollar of disposable income that goes to saving.
d. all of the above are true.
Question 10By Gresham's law, commodity money will always drive out fiduciary money.
a. True
b. False
Indicate whether the statement is true or false
Question 11Ceteris paribus, the fear among travelers created by the 9-11 attacks would have what impact on the market for air travel?
a. an increase in equilibrium price and an increase in equilibrium quantity.
b. an increase in equilibrium price and a decrease in equilibrium quantity.
c. a decrease in equilibrium price and an increase in equilibrium quantity.
d. a decrease in equilibrium price and a decrease in equilibrium quantity.
Question 12What is the impact of a 10 billion tax cut on consumer spending, if MPC is equal to 0.8?
a. 50 billion
b. 40 billion
c. 10 billion
d. 20 billion
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