ANSWER: a. amount of goods and services produced from each hour of a worker’s time.
TYPE: M KEY1: D SECTION: 3 OBJECTIVE: 8 RANDOM: Y
[23]. Inflation is defined as
a. a period of rising productivity in the economy.
b. an increase in the overall level of prices in the economy.
c. a period of rising income in the economy.
d. an increase in the overall level of output in the economy.
ANSWER: b. an increase in the overall level of prices in the economy.
TYPE: M KEY1: D SECTION: 3 OBJECTIVE: 8 RANDOM: Y
[24]. Inflation causes
a. productivity to increase.
b. the value of money to rise.
c. the value of money to fall.
d. the government to lower taxes.
ANSWER: c. the value of money to fall.
TYPE: M KEY1: D SECTION: 3 OBJECTIVE: 8 RANDOM: Y
[25]. Which of the following is the most correct statement about the relationship between inflation and unemployment?
a. In the long run, reducing inflation is associated with rising unemployment.
b. In the short run, reducing inflation is associated with falling unemployment.
c. In the long run, reducing inflation is associated with falling unemployment.
d. In the short run, reducing inflation is associated with rising unemployment.
ANSWER: d. In the short run, reducing inflation is associated with rising unemployment.
TYPE: M KEY1: D SECTION: 3 OBJECTIVE: 8 RANDOM: Y
[1] ANSWER: d. scarcity.
TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y
[2] ANSWER: c. there is less of a good or resource available than people wish to have.
TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y
[3] ANSWER: a. how society manages its scarce resources.
TYPE: M KEY1: D OBJECTIVE: 1 RANDOM: Y
[4] ANSWER: c. fairness.
TYPE: M KEY 1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y
[5] ANSWER: b. there is usually a tradeoff between equity and efficiency.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y
[6] ANSWER: a. what you give up to get that item.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 3 RANDOM: Y
[7] ANSWER: b. the enjoyment and exercise he would have received had he gone for a bike ride.
TYPE: M KEY1: C SECTION: 1 OBJECTIVE: 3 RANDOM: Y
[8] ANSWER: a. marginal benefit is greater than the marginal cost.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 4 RANDOM: Y
[9] ANSWER: c. small incremental adjustment.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 4 RANDOM: Y
[10] ANSWER: d. incentives.
TYPE: M KEY1: D SECTION: 1 OBJECTIVE: 5 RANDOM: Y
[11] ANSWER: a. Trade can make every nation better-off.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 6 RANDOM: Y
[12] ANSWER: c. sell roller blades to Canada, and should buy Canadian hockey sticks.
TYPE: M KEY1: C SECTION: 2 OBJECTIVE: 6 RANDOM: Y
[13] ANSWER: d. prices.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y
[14] ANSWER: b. are more efficient.
TYPE: M KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y