If the average price level in 1991 was 1.20 relative to the base year in 1986, then a dollar in 1991 bought 20 percent more goods and services than a dollar in 1986.
a. True
b. False
Indicate whether the statement is true or false
Question 2Which of the following statements most likely lies within the realm of microeconomics?
a. Unemployment rises during a recession and falls during an expansion.
b. A rapid acceleration of the supply of money may create inflation.
c. An increase in government spending will increase the aggregate demand for goods and services in the economy.
d. An increase in labor costs will increase the additional cost of producing another airplane.
Question 3Inflation is defined as the sustained increase in relative prices.
a. True
b. False
Indicate whether the statement is true or false
Question 4The branch of economics that studies the aggregate decisions of all households and all firms is called:
a. positive economics.
b. normative economics.
c. microeconomics.
d. macroeconomics.
Question 5The more difficult it is for a firm to adjust its labor force in the face of economic fluctuation, the more likely the firm is to hire new workers.
a. True
b. False
Indicate whether the statement is true or false
Question 6Which of the following is an example of microeconomic analysis?
a. impact of taxation on national income
b. rate of increase in the national debt
c. relationship between inflation and interest rates set by the Federal Reserve
d. none of the above
Question 7When government provides generous unemployment benefits, unemployed workers have lesser incentives to look for jobs.
a. True
b. False
Indicate whether the statement is true or false
Question 8Which of the following is most likely a topic of discussion in macroeconomics?
a. an increase in the price of a pizza
b. a decrease in the production of DVD players by a consumer electronics company
c. an increase in the wage rate paid to automobile workers
d. a decrease in the unemployment rate
Question 9Countries that have policies that encourage unemployment should be expected to have more unemployed workers.
a. True
b. False
Indicate whether the statement is true or false
Question 10Economics can be divided into two main branches of study:
a. capitalism and communism.
b. capitalism and socialism.
c. demand and supply.
d. microeconomics and macroeconomics.
Question 11In the 1990s, the unemployment rates in the U.S. were higher than that in the European nations.
a. True
b. False
Indicate whether the statement is true or false
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