Economics Multiple Choice Questions

Which of the following will cause the demand curve for gasoline to shift leftward? a. a decrease in the price of gasoline b. an increase in the price of gasoline c. a leftward shift of the supply of gasoline d. a rightward shift of the supply of cars e. a decrease in the price of bicycles Markets reduce transactions costs a. by decreasing the time spent searching for information about goods and services b. only when they have a highly structured set of rules like the New York Stock Exchange c. because each market uses the same set of rules for buying and selling goods and services d. only when the government can coordinate the plans of many buyers and sellers e. when prices ... click for more

Economics Multiple Choice Questions

If supply decreases along a given demand curve, a. an excess quantity demanded will be created, increasing the equilibrium price and causing equilibrium quantity to fall b. an excess quantity supplied will be created, lowering the equilibrium price and causing equilibrium quantity to rise c. an excess quantity demanded will be created, raising the equilibrium price and quantity d. an excess quantity supplied will be created, lowering the equilibrium price and quantity e. price will fall, shifting the demand curve outward, raising the equilibrium quantity Fiscal policy focuses on manipulating a. aggregate demand to smooth out business fluctuations b. aggregate supply to smooth out b... click for more

Economics Multiple Choice Questions

Assume that initially G is $100 and equilibrium real GDP demanded is $1,000. If the multiplier is 4 and G increases to $200, real GDP demanded will increase a. by $100 b. by $2,000 c. by $1,000 d. to $1,400 e. to $2,000 If autonomous net taxes decline by $40 billion and the MPC = 0.75, then equilibrium real GDP demanded a. declines by $120 billion b. increases by $120 billion c. declines by $160 billion d. increases by $160 billion e. increases by $40 billion Assume autonomous net taxes rise by $400; the marginal propensity to consume = 3/4. Net exports, planned investment, taxes, and government purchases are autonomous and remain fixed. As a result, saving will initially ... click for more

Economics Multiple Choice Questions

Assume autonomous net taxes rise by $500; the marginal propensity to consume = 3/4. Net exports, planned investment, taxes, and government purchases are autonomous and remain fixed. As a result, equilibrium real GDP demanded will a. rise by $500 b. fall by $500 c. rise by $1,500 d. fall by $1,500 e. rise by $2,000 Which of the following is not true about classical economists? a. They criticized mercantilism as an economic system. b. They advocated laissez-faire policies to promote economic growth. c. They believed the economy would naturally tend toward full employment. d. They believed prices and wages react slowly to market changes. e. They discouraged government interventio... click for more

Economics Multiple Choice Questions

Large federal budget deficits a. can best be reduced by automatic stabilizers b. make it difficult to use discretionary fiscal policy c. in the mid to late 1980s were the result of a severe recession d. still constitute only about 1 percent of GDP e. have little to do with the growth of the federal debt The lower tax rates enacted in the early 1980s were intended to a. increase the supply of labor b. increase the price level c. increase unemployment benefits d. reduce potential GDP e. reduce the money supply The Reagan experiment in supply-side economics resulted in all of the following except a. growth in employment b. a period of sustained economic growth c. a reduction ... click for more