The degree of government involvement in the economy is greatest in
a. a command economy.
b. a mixed economy.
c. a market economy.
d. a traditional economy.
Question 2Any permanent change in the quantity of any factor of production available capital, technology, land, or labor can cause a shift in both the long-run and short-run aggregate supply curves.
a. True
b. False
Indicate whether the statement is true or false
Question 3A trade deficit occurs when:
a. a country imposes a price floor on the good in which it has a comparative advantage.
b. a country's imports exceed its exports.
c. a country imposes a price ceiling on the good in which it has a comparative advantage.
d. a country's exports exceed its imports.
e. the domestic product market is in disequilibrium.
Question 4Which of the following is not one of the fundamental economic questions all societies must face?
a. What goods and services are to be produced?
b. How goods and services are to be produced?
c. Which goods and services are to be produced by the government?
d. Who is to receive the goods and services produced in the society?
Question 5The economy is in long-run equilibrium only when the short run aggregate supply curve intersects the aggregate demand curve along the long run aggregate supply curve.
a. True
b. False
Indicate whether the statement is true or false
Question 6A surplus in a country's trade balance means that:
a. its net exports exceed transfer payments.
b. the country's currency is over-valued.
c. the value of its net exports is positive.
d. imports into the country exceed exports.
e. domestic savings exceeds domestic investment.
Question 7Which of the following is not an example of a consumption good?
a. video games.
b. a television
c. a tractor
d. a trip to Hawaii
Question 8The long-run aggregate supply curve is the relationship between the price level and the quantity of real GDP that is supplied once input prices have had time to fully adjust to that price level.
a. True
b. False
Indicate whether the statement is true or false
Question 9Which of the following is true of Western Europe, Japan, Canada, Mexico, and China taken together?
a. All these countries are classified as high-income countries by the World Bank.
b. They are all members of the North American Free Trade Agreement NAFTA.
c. All these countries are considered developing countries by the World Bank.
d. They are collectively the largest trade partners of the U.S.
e. They are the five largest exporters of agricultural produce in the world.
Question 10Since resources are not equally substitutable across uses:
a. the production possibilities curve will be positively sloped.
b. the production possibilities curve will be a straight line.
c. the production possibilities curve will be bowed outward.
d. the production possibilities curve will be bowed inward.
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