TAKE A QUIZ

Ceteris paribus, a decrease in the number of sellers of a product will cause its equilibrium price to 

The demand curve of a good or service, according to the law of demand,

The supply a good is determined by all but which of the following?

When a market is at the equilibrium price, we can say that:

Ceteris paribus means

If an economy is producing a combination of goods inside the production possibilities curve,

A mixed economy, like the one in the United States

Economists argue that the 'thing' we hope to maximize is

The basic factors of production are:

If the demand for coffee increases, ceteris paribus, the equilibrium price will also increase because

When government intervenes in a market economy

In economics, the term market mechanism refers to

When economists speak of externalities, they are referring to

The total market value of all goods and services produced in a country during a one year period is

An example of a positive externality is

The law of demand states that the quantity of a good demanded, ceteris paribus, will

Economic growth is

Of the following, which is a factor market?

When a third party pays for or receives benefits from an economic transaction that s/he was not involved, we say that a(n) ________ has occurred.

The formula for per capita GDP is

Of the following, which is not a factor of production?

Outsourcing allows the US economy to

Of the following, which is not held constant along a given supply curve for a good?

Tickets to a concert go on sale and many go unsold. This suggests that

Of the following, which is likely to cause a decrease in the supply of lumber, ceteris paribus?

Of the following, which is a determinant of supply?

In the event of a market failure, we often rely on __________ for corrective action.

The demand for a good is determined by all but which of the following?

If Honda and Toyota motorcycles are substitutes, then a decrease in the price of Honda motorcycles will result in

When a market is experiencing a surplus

The concept of laissez faire is based on the belief that

The factors of production are

Consumers purchase ________ in product markets and supply ________ in the factor market.

For a price ceiling to have an effect on a market, it must be

Tickets for a concert go on sale and sell out almost instantaneously and a waiting list lengthens. This indicates that:

The invisible hand refers to

A country can raise the level of human capital its economy by

The equilibrium price and quantity in a market are found where

Of the following, which is not a factor of production?

A technological advance means that

We can define the science of economics as the study of

Of the following, which is a determinant of market supply?

Of the following, which is most likely purchased in a factor market?

Which sectors of U.S. real GDP increased in size relative to total U.S. real GDP between 1950 and 2000?

If an industry has a highly capital-intensive production process, we would expect its

When government regulates food additives, it is attempting to

The definition of ‘market mechanism’ is

A basic formula to calculate productivity is

When government intervenes in markets, the potential problem is that

When a third party pays for or receives benefits from an economic transaction that s/he was not involved, we say that a(n) ________ has occurred.

We can say that a monopoly exists in an industry where

Which of the following is true when an economy is producing efficiently?

One reason US governments invests in the development of human capital through education is that

When a market experiences a surplus of a product,

With regard to income inequality, which of the following statements is true?

If both the demand for and supply of french fries increased (although not necessarily by the same amount), how would this change the equilibrium price and quantity of French fries?

A country can raise the level of human capital its economy by

If peanut butter and jelly are complements. Ceteris paribus, a decrease in the price of peanut butter will cause the demand for jelly to

When government regulates food additives, it is attempting to

A technological advance means that

Suppose a series of droughts damages many of the world’s tea plantations and, at the same time, a British comedy on Netflix leads millions to want to drink more tea. In the market for tea, we would expect.

A technological improvement is shown by

The Antitrust Division of the US Justice Department seeks to

The problem with negative externalities is that their external cost isn’t fully reflected in the price of the good that produces them and, therefore,

Relative to the average household in most low-income countries, poor people in the United States, on average, receive

Which of the following would lead to an increase in the demand curve for new cars?

If peanut butter and jelly are complements. Ceteris paribus, an increase in the price of peanut butter will cause the demand for jelly to

Of the following events, which would cause a rightward shift in the supply curve for tennis rackets?

If an economy’s annual output increases by 3% while its inputs increased by 2%, we can say that

Of the following events, which would cause a rightward shift in the supply curve for tennis rackets?

When the Fed wants to increase the lending capacity of member banks, it will

Imagine a bank that has no excess reserves and faces a 20% reserve requirement. If the bank has a withdrawal of $1.000, it must

Of the following, which is the tool used most frequently by the Federal Reserve to enact monetary policy?

If the Fed finds that people are willing to buy fewer government bonds than it wants to sell, it must

If the government wants to employ fiscal policy to increase real GDP in the short run, it should

Imagine a bank that has no excess reserves and faces a 15% reserve requirement. If the bank has a withdrawal of $1.000, it must

Of the following, which does NOT occur when the Federal Reserve raises the discount rate?

If the Federal Reserve wants to decrease the money supply, it can

If the Federal Reserve wants to decrease the federal funds rate, it can do this through the open market operation of

If an inflationary gap exists, a tax increase will have the effect of which of the following

The effect that we would expect an expansionary monetary policy to have the AD curve is:

Assume there is an inflationary gap and the economy is in equilibrium on the SRAS at a level of real GDP higher than the economy’s long-run real GDP. If the government decreases spending, then, in the short run, we would expect

Of the following statements, which is a basic assumption of the Ricardian equivalence theorem?

   If you hide money under your mattress to be used to make purchases later, money is acting as a

A decrease in private sector expenditures as a result of increased government spending, is known as

Of the following, which is the principal monetary policy tool frequently used by the Federal Reserve to alter the reserves of the banking system?

   As a store of value, money

The thrust of the quantity theory of money is its assertion that

If expansionary fiscal policy is followed by the crowding out effect, the result is

When the market interest rate falls, the selling price of existing bonds in the market will, ceteris paribus,

Bank are required to hold a minimum amount of their deposits in reserves, called

By buying bonds from the public, the Federal Reserve

Of the following, which will NOT change if the Federal Reserves increases the reserve requirement?

The simple money multiplier equals

Of the following, which is an action a bank might take if finds that it does not have enough reserves to meet its reserve requirement.

If the government deliberately modifies its taxing and spending policies with the goal of influencing the economy and its growth, it is implementing

Of the following, which is defined as part of M1?

The Federal Funds rate is the interest rate on

The interest rate charged when member banks lend reserves to one another on an overnight basis is known as the

Fiscal policy involves the

If Bob keeps $1,000 hidden in his home “just in case…”, we would say that this reflects his

Of the following, which is included in M1 but NOT in M2?

Of the following, which is responsible for the Federal reserve's daily activity in financial markets?

According to economists, the demand for money as essentially a demand for

Of the following, which is the market where reserves can be borrowed by one bank from another on an overnight basis?

Retail money market mutual fund balances are a part of

Only ______ are allowed to hold deposits at Federal Reserve Bank branches.

   In order for a barter to occur there must be a

If the Federal Reserve increases the required reserve ratio from 10% to 20%, the money multiplier will

The primary means the Federal Reserve uses to manage the money supply in the United States is to regulate

Of the following, which is a reason why people hold money as M1?

If the Federal Reserve reduces the required reserve ratio from 20% to 10%, the money multiplier will

The primary drawback of holding money balances as an asset is

The money supply measure, M2, includes M1

Fiscal policy is defined as

Of the following, which is NOT included in M1?

Of the following, which is NOT defined as part of M1?

Certificates of deposit are a part of

   The issue described as the “double coincidence of wants” occurs when

In the United States, fiscal policy is carried out by which branch(es) of government?

When the Federal Reserve changes the discount rate, it changes

Of the following, which is an activity that the Federal Reserve System engages in?

The effect that we would expect an expansionary fiscal policy to have the AD curve is:

Imagine that the required reserve ratio is 20% and that banks are holding no excess reserves; if the Federal Reserve buys $20 million of bonds from the public, then the total lending capacity of the banking system will

The _________ is the average number of times a dollar is spent on final goods and services in a yea

The thrust of the quantity theory of money is its assertion that

Imagine that the required reserve ratio is 20% and that banks are holding no excess reserves; if the Federal Reserve sells $50 million of bonds to the public, then M1 will eventually

Imagine that the required reserve ratio is 10% and that banks are holding no excess reserves; if the Federal Reserve buys $50 million of bonds from the public, then the total lending capacity of the banking system will

Of the following, which is an activity that the Federal Reserve System does NOT engage in?

Imagine that the required reserve ratio is 10% and that banks are holding no excess reserves; if the Federal Reserve buys $50 million of bonds from the public, then M1 will eventually

Of the following, which would occur if we lost faith in the value of our money?

The argument that changes in the money supply lead to proportional changes in the price level is based on which theory?

The effect that we would expect an expansionary monetary policy to have the AD curve is:

Imagine that the required reserve ratio is 20% and that banks are holding no excess reserves; if the Federal Reserve sells $50 million of bonds to the public, then the total lending capacity of the banking system will

The Quantity Theory of Money tells us that if an economy is at full-employment, an increase in money supply will result in inflation—that is, unless

The quantity theory of money assumes that

The effect that we would expect an expansionary monetary policy to have the AD curve is:

Of the following, which is an activity that the Federal Reserve System engages in?

The Quantity Theory of Money tells us that if an economy is at full-employment, an increase in money supply will result in inflation—that is, unless

Imagine that the required reserve ratio is 20% and that banks are holding no excess reserves; if the Federal Reserve buys $50 million of bonds from the public, then M1 will eventually

Which of the following best describes the equation of exchange? (where Ms = money supply; V = velocity; P = price level; and Y = output

Imagine that the required reserve ratio is 10% and that banks are holding no excess reserves; if the Federal Reserve sells $50 million of bonds from the public, then M1 will eventually