Question 1

In the United States,incomes historically have grown about 2 percent per year.At this rate,average income doubles every

Accepted Answer

A)  15 years.
B)  25 years.
C)  35 years.
D)  45 years.E) A) and B)
F) None of the above

Question 2

Incomes of U.S.households in the 1970s and 1980s

Accepted Answer

A)  grew rapidly,due to the widespread success of labor unions in pushing up wages during those decades.
B)  grew rapidly,due to several increases in the minimum wage during those decades.
C)  grew rapidly,due to government policies that discouraged the importation of foreign products during those decades.
D)  grew slowly,due to slow growth of the output of goods and services per hour of U.S.workers' time during those decades.E) B) and C)
F) A) and D)

Question 3

The fact that different countries experience different standards of living is largely explained by differences in those countries'

Accepted Answer

A)  populations.
B)  productivity levels.
C)  locations.
D)  None of the above is correct.Economists are puzzled by differences in standards of living around the world.E) C) and D)
F) A) and B)

Question 4

In the early 1980s,U.S.economic policy was directed toward reducing inflation.What would you have expected to observe during this short period of time?

Accepted Answer

A)  Inflation fell and unemployment fell.
B)  Inflation and unemployment were both unaffected.
C)  Inflation fell and unemployment increased.
D)  Inflation fell and unemployment was unchanged.E) None of the above
F) All of the above

Question 5

The historical rise in living standards of American workers is primarily a result of

Accepted Answer

A)  the influence of labor unions in America.
B)  tariff protection imposed by the American government.
C)  the enactment of minimum-wage laws in America.
D)  the rise in American productivity.E) None of the above
F) C) and D)

Question 6

The tradeoff between inflation and unemployment

Accepted Answer

A)  implies that policies designed to reduce unemployment also reduce inflation.
B)  was eliminated by improved economic policies in the 1900s.
C)  is a long-run tradeoff,persisting for decades,according to most economists.
D)  None of the above are correct.E) A) and B)
F) All of the above

Question 7

In the United States,incomes have historically grown

Accepted Answer

A)  about 0.5 percent per year.
B)  about 2 percent per year.
C)  about 4 percent per year.
D)  about 6 percent per year.E) None of the above
F) A) and C)

Question 8

Suppose a typical worker in India can produce 32 units of product in an eight-hour day,while a typical worker in Bangladesh can produce 30 units of product in a 10-hour day.We can conclude that

Accepted Answer

A)  worker productivity in Bangladesh is higher than in India.
B)  the standard of living will likely be higher in India than in Bangladesh.
C)  productivity is 4 units per hour for the worker in Bangladesh and 3 units per hour for the worker in India.
D)  there will be no difference between the standard of living in India and Bangladesh.E) A) and B)
F) A) and C)

Question 9

A worker in Vietnam can earn $6 per day making cotton cloth on a hand loom.A worker in the United States can earn $85 per day making cotton cloth with a mechanical loom.What is the likely explanation for the difference in wages?

Accepted Answer

A)  U.S.textile workers belong to a union,whereas Vietnamese textile workers do not belong to a union.
B)  There is little demand for cotton cloth in Vietnam and great demand in the U.S.
C)  Labor is more productive making cotton cloth with a mechanical loom than with a hand loom.
D)  Vietnam has a low-wage policy to make its textile industry more competitive in world markets.E) A) and B)
F) All of the above

Question 10

The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009

Accepted Answer

A)  was intended to reduce unemployment.
B)  may lead to excessive inflation over time.
C)  resulted in higher taxes and an increased supply of money.
D)  Both a and b are correct.E) None of the above
F) A) and B)

Question 11

The term "productivity"

Accepted Answer

A)  means the same thing as "efficiency."
B)  is seldom used by economists,as its meaning is not precise.
C)  refers to the quantity of goods and services produced from each unit of labor input.
D)  refers to the variety of goods and services from which households can choose when they shop.E) A) and B)
F) None of the above

Question 12

In the short run,which of the following is not correct?

Accepted Answer

A)  Increasing the money supply increases the demand for goods and services.
B)  Increasing the money supply encourages firms to hire more workers.
C)  Lowering the money supply leads to a higher level of unemployment.
D)  Policies that encourage higher employment will also induce a lower rate of inflation.E) None of the above
F) A) and B)

Question 13

Germany could have avoided the high inflation that it experienced in the 1920s by

Accepted Answer

A)  not directing so many of its resources toward preparation for World War II.
B)  not increasing taxes so much on the German middle class.
C)  not allowing the quantity of money to increase so rapidly.
D)  using government policies to stimulate the economy more so than what was done.E) A) and D)
F) None of the above

Question 14

The slow growth of U.S.incomes during the 1970s and 1980s can best be explained by

Accepted Answer

A)  unstable economic conditions in Eastern Europe.
B)  increased competition from abroad.
C)  a decline in the rate of increase in U.S.productivity.
D)  a strong U.S.dollar abroad,hurting U.S.exports.E) All of the above
F) B) and C)

Question 15

Which of the following is the most correct statement about the relationship between inflation and unemployment?

Accepted Answer

A)  In the short run,falling inflation is associated with falling unemployment.
B)  In the short run,falling inflation is associated with rising unemployment.
C)  In the long run,falling inflation is associated with falling unemployment.
D)  In the long run,falling inflation is associated with rising unemployment.E) A) and D)
F) B) and C)

Question 16

The increase in living standards of American workers over the past century is primarily due to

Accepted Answer

A)  the success of labor unions.
B)  minimum-wage laws.
C)  improvements in productivity.
D)  None of the above are correct.E) B) and C)
F) None of the above

Question 17

In the 1990s,inflation in the United States was

Accepted Answer

A)  very close to zero.
B)  about 3 percent per year.
C)  about 6 percent per year.
D)  commonly referred to as "public enemy number one."E) All of the above
F) A) and C)

Question 18

To increase living standards,public policy should

Accepted Answer

A)  ensure that workers are well educated and have the necessary tools and technology.
B)  make unemployment benefits more generous.
C)  move workers into jobs directly from high school.
D)  ensure a greater degree of equality,taking all income-earners into account.E) B) and C)
F) C) and D)

Question 19

The business cycle is measured by the

Accepted Answer

A)  production of goods and services.
B)  number of people employed.
C)  the interest rate.
D)  Both a and b are correct.E) None of the above
F) A) and C)

Question 20

Over the past century,the average income in the United States has risen about

Accepted Answer

A)  twofold.
B)  fivefold.
C)  eightfold.
D)  tenfold.E) All of the above
F) B) and D)

Exam 1: Ten Principles of Economics: How the Economy As a Whole Works

In the short run,which of the following is not correct?

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Incomes of U.S.households in the 1970s and 1980s

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Suppose a typical worker in India can produce 32 units of product in an eight-hour day,while a typical worker in Bangladesh can produce 30 units of product in a 10-hour day.We can conclude that

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In the 1990s,inflation in the United States was

Correct AnswerverifiedShow Answer

The term "productivity"

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Which of the following is the most correct statement about the relationship between inflation and unemployment?

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The increase in living standards of American workers over the past century is primarily due to

Correct AnswerverifiedShow Answer

The slow growth of U.S.incomes during the 1970s and 1980s can best be explained by

Correct AnswerverifiedShow Answer

The fact that different countries experience different standards of living is largely explained by differences in those countries'

Correct AnswerverifiedShow Answer

To increase living standards,public policy should

Correct AnswerverifiedShow Answer

In the early 1980s,U.S.economic policy was directed toward reducing inflation.What would you have expected to observe during this short period of time?

Correct AnswerverifiedShow Answer

In the United States,incomes historically have grown about 2 percent per year.At this rate,average income doubles every

Correct AnswerverifiedShow Answer

Germany could have avoided the high inflation that it experienced in the 1920s by

Correct AnswerverifiedShow Answer

The business cycle is measured by the

Correct AnswerverifiedShow Answer

The historical rise in living standards of American workers is primarily a result of

Correct AnswerverifiedShow Answer

The tradeoff between inflation and unemployment

Correct AnswerverifiedShow Answer

Over the past century,the average income in the United States has risen about

Correct AnswerverifiedShow Answer

In the United States,incomes have historically grown

Correct AnswerverifiedShow Answer

A worker in Vietnam can earn $6 per day making cotton cloth on a hand loom.A worker in the United States can earn $85 per day making cotton cloth with a mechanical loom.What is the likely explanation for the difference in wages?

Correct AnswerverifiedShow Answer

The combination of President Obama's strategies and the Federal Reserve's reaction to the deep economic downturn in the US in 2008 and 2009

Correct AnswerverifiedShow Answer

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