Which of the following is not an autonomous determinant of consumption expenditures?
a. real wealth
b. the interest rate
c. tastes and preferences
d. current disposable income
Question 2A higher U.S. federal budget deficit may act to raise future U.S. interest payments to foreigners.
a. True
b. False
Indicate whether the statement is true or false
Question 3The quantity of hamburger that households are willing to purchase is predicted to rise if there is:
a. a fall in the price of hot dogs
b. a fall in the price of hamburger buns
c. a rise in the price of onion rings
d. a rise in the price of catsup
Question 4Which of the following will result as part of the interest rate effect when the price level rises?
a. Households and firms increase their holdings of money.
b. Interest rates will increase.
c. A lower quantity of real GDP will be demanded.
d. All of the above will result as part of the interest rate effect when the price level rises.
Question 5Increased domestic imports and higher international trade deficits are possible results of government surpluses.
a. True
b. False
Indicate whether the statement is true or false
Question 6Suppose that a more efficient way to produce a good is discovered, thus lowering production costs for the good. This will cause:
a. an increase in supply, or a rightward shift of the supply curve.
b. a decrease in supply, or a leftward shift of the supply curve.
c. an increase in quantity supplied, or a movement down the supply curve.
d. a decrease in quantity supplied, or a movement up the supply curve.
Question 7When a person's consumption goes from 8,000 to 12,000 when her disposable income goes from 10,000 to 20,000, her MPC equals:
a. 0.4.
b. 0.6.
c. 0.75.
d. 0.8.
Question 8Assume that French budget deficits have raised the French prime interest rate relative to the U.S. T-bill rate. As a result, we would expect the U.S. dollar to depreciate and the U.S. net exports to rise.
a. True
b. False
Indicate whether the statement is true or false
Question 9Sellers who were originally willing to supply 400 units of a good at 4 per unit are now willing to supply 800 units at 4 per unit. That change would be described as:
a. an increase in supply.
b. a decrease in supply.
c. an increase in quantity supplied.
d. a decrease in quantity supplied.
Question 10Which of the following changes in taxes would lead to the smallest increase in consumption?
a. a 20,000 decrease in taxes, if MPC equals 0.5
b. a 12,000 decrease in taxes, if MPC equals 0.75
c. a 15,000 decrease in taxes, if MPC equals 0.6
d. a 30,000 decrease in taxes, if MPC equals 0.25
Question 11The reduction in the U.S. government deficit in the early 1990s was the result of strong economic growth.
a. True
b. False
Indicate whether the statement is true or false
Question 12A leftward shift in supply could be caused by:
a. an improvement in productive technology.
b. a decrease in income.
c. some firms leaving the industry.
d. a fall in the price of inputs to the industry.
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