Eco Flashcards
In which of the following situations is the change in the equilibrium price of a good indeterminate?
When demand remains constant and supply increases
If butter and margarine are substitute goods, an increase in the price of butter is most likely to:
shift the demand curve for margarine rightward.
Suppose a consumer can choose to consume either apples or oranges. Which of the following results when the price of each fruit increases by 15 percent?
The substitution effect of this price change is zero.
Suppose the market for beef cattle was initially in equilibrium An increase in the price of the fodder used to feed cattle would cause:
the demand for beef cattle to increase, driving the price of beef upward
Sugar and honey are viewed as substitutes for each other in many cooking applications. If the price of sugar rises, we would expect:
the demand for honey to increase.
If the price of potato chips increases, other things constant, demand for potato chip dip will:
decrease because the goods are complements.
Which of the following statements about a demand curve is true?
The demand curve for a good will not shift when its price changes.
The income effect of a decrease in the price potatoes, an inferior good, is a(n):
decrease in the quantity demanded of potatoes.
Producers supply larger quantities of any good at higher prices because:
higher prices attract resources from other uses.
Which of the following is most likely to cause the demand for ice cream, a normal good, to decrease?
decrease in consumer income
Other things constant, the demand for a product is the amount that:
buyers are willing and able to purchase different prices
The table given below shows the quantity supplied and the quantity demanded for a good at different prices. If the price of the good described in the table below is $1.60, then an economist would expect the:
price to decrease to $1.50.
Which of the following is likely to shift the market supply curve for corn in the short run?
A change in the price of pesticides
In the history of the U.S. economy, which economic era saw both high unemployment and high inflation at the same time?
From the early 1970s to the early 1980s
Which of these s a likely consequence of an increase in the price level in the economy, other things constant?
Government demanding less military hardware
Macroeconomie equilibrium is best described as a situation in which:
quantity supplied equals quantity demanded at a unique price level.
The aggregate demand curve for an economy depicts the:
quantity of goods and services demanded at different price levels during a given time period, other things held constant.
Economic activities that signal forthcoming changes in the economy are referred to as:
leading economic indicators.
Macroeconomics is a branch of economics that studies:
the overall performance of the economy.
Which of these changes was observed in the U.S. between 1929 and 1933?
The aggregate demand curve shifted inward with no change in the aggregate supply curve
Which of these is a likely impact of a decrease in the price level in an economy on the aggregate supply in the economy?
A decrease in the quantity of real GDP supplied
The Keynesian approach to government economic policy
highlighted the role of aggregate demand.
Identify the correct statement.
A budget deficit is a flow variable, while debt is a stock variable.
Stagflation in an economy can be effectively controlled by Keynesian demand management policies.
False
The recession that set in after December 2007 can be attributed to:
a decline in home prices and an increase in foreclosures.
A fall in the price level wilI:
cause a downward movement along the aggregate demand curve.
We can conclude that there has been inflation since the base year if the GDP price index in the current year is
greater than 100
Depreciation refers to:
investment undertaken merely to replace worn-out capital.
In the double-entry bookkeeping system used to track the economy.
the value of aggregate output equals the aggregate income paid for the resources used to produce that output
Which of the following is an example of a leakage from the circular flow of income and expenditure?
Imports
If the price of a good increases compared to the base year, then the price level also increases.
True
Which of the following is an example of an injection into the circular flow of income and expenditure?
Government spending
The GDP price index:
measures the average price of final goods and services produced in an economy
Which of the following correctly illustrates the leakages- injections approach to GDP?
S+(NT) M I+G+X
Which of the following is an example of an intermediate good?
O Sugar bought by a bakery
Which of the following is a problem associated with gross domestic product (GDP) as a measure of social welfare?
It excludes the value of leisure time.
The gross domestic product (GDP) excludes:
the value of intermediate goods produced in an economy during a given period.