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Multiple Choice

I need some help with the following questions:

1. The mixed economy is the dominant economic system in the world because
custom and religion have no influence on economic decisions in these systems
pure capitalist economies have placed more control in the hands of individuals in recent years
there is public (i.e., government) ownership of resources but regulation of government by individuals reduces some of the flaws of pure capitalism
there is private ownership of property but government regulation of individuals reduces some of the flaws of pure capitalism
governments in pure command economies have increased their control over decision-making in recent years

2. The equilibrium wage
is the same in all labor markets
occurs where the supply of labor curve begins to bend backward
cannot be calculated because there are so many labor markets
is determined by the market demand for labor and the market supply of labor

3. Strikes are expensive for
the public only because output falls
both the public and employers because workers are compensated by the union for lost income
employers only because their revenue falls
workers, employers, and the public

4. If a monopolist is forced to set price equal to average total cost, economic profit
will be negative, and the monopolist may go out of business
will be zero
will be positive
will be negative, and the firm will stay in business if there are significant fixed costs

5. Increased international trade and deregulation have resulted in
increased competition in the U.S. economy
greater monopolization of industries in the U.S. economy
more oligopolies and cartels in the U.S. economy
greater government intervention in the U.S. economy

6. The purpose of a political action committee is
to help enact officials sympathetic to its members' special interests
to help elect officials who will enact in fair legislation
to raise money for public interest groups
to exchange trade secrets

7. Equilibrium of aggregate supply and aggregate demand is best described as a situation in which
the slope of aggregate demand equals the slope of aggregate supply
quantity demanded exceeds quantity supplied
quantity demanded equals quantity supplied at a unique price level
quantity supplied exceeds quantity demanded at a unique price level

8. The aim of supply-side economics is
increase government spending to stimulate aggregate supply
stimulate exports to increase the balance of payments
decrease wages to make production cheaper
lower taxes to increase the supply of resources

9. Labor productivity is measured by
total employment/total output
total output/total employment
labor force/total output
total output/labor force

10. Which of the following is the best indicator of the standard of living?
nominal GDP
real GDP
real GDP per capita
productivity

11. In the resource market,
businesses borrow money to buy the capital resources they need
businesses sell services to the households
firms provide the resources to the households
households sell the resources to firms in return for factor payments

12. Depreciation refers to a decrease in the value of a durable good caused by
an increase in the price level
changes in the depreciation allowance
wear and tear over time
changes in tax law

13. If real GDP increased by 3 percent, then
real output has increased by 3 percent
the price level has increased by 3 percent
consumer spending increased by 3 percent
government spending increased by 3 percent

14. Cost-push inflation is typically caused by an
inward shift of the demand curve
outward shift of the supply curve
inward shift of the supply curve
inward shift of the aggregate supply and demand curves

15. Anticapted inflation
allows us to eliminate the problems associated with unemployment
causes more problems than unanticipated inflation
causes fewer problems than unanticipated inflation
is easy to predict for economists

16. Unanticipated inflation is usually viewed as undesirable because it
reduced everyone's nominal wages
redistributes income and wealth
is accompanied by reductions in real GDP
usually results in the public sector growing less rapidly than the private sector

17. The federal government budget is
a year-end record of how much the government received in income and how much it spent
a plan for government expenditures and revenues for the coming year
always in balance: receipts must equal expenditures
equal to government receipts minus government expenditures

18. Which institution was created under the Employment Act of 1946 to assist the President in formulating an appropriate fiscal policy?
the Council of Economic Advisers
the Board of Governors of the Fed
the Office of Management and Budget
the Fed's Open Market Committee

19. The opportunity cost of holding money is measured by the
interest rate
liquidity lost by holding money
money supplu curve
inflation rate

20. The United States is major exporter of
diamonds
bauxite
coffee
corn

21. Dumping is the practice of
selling a lower quality product abroad
selling a commodity abroad at a price lower than the domestic price
selling a commodity abroad at a price higher than the domestic price
flooding a foreign market with large quantities of a good

Solution Preview

1. The mixed economy is the dominant economic system in the world because

there is private ownership of property but government regulation of individuals reduces some of the flaws of pure capitalism

2. The equilibrium wage

is determined by the market demand for labor and the market supply of labor

3. Strikes are expensive for

workers, employers, and the public

Workers pay for the strike in lost wages, employers with lost income, and the public by loss of the good or service that would have otherwise been produced.

4. If a monopolist is forced to set price equal to average total cost, economic profit
will be negative, and the monopolist may go out of business

Because the firm cannot cover its fixed costs, it will eventually shut down.

5. ...

Solution Summary

Multiple choice regarding wages and strikes.

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