When the price of a good increases, the law of demand states that
A
the quality of the good has improved
B
purchasing power increases
C
less of the good is produced
D
the demand curve will shift to the left
E
the quantity purchased decreases
2
IntermediateSection I: Question 2
Each quarter, the government of Treeland adds up the total amount of consumer spending, investment spending, government spending, and net exports. The government is calculating Treeland's
A
trade balance
B
balance of payments
C
net capital outflow
D
consumer price index
E
gross domestic product
3
IntermediateSection I: Question 3
The table below shows the number of workers required in Nation L and Nation W to produce one unit of bolts or one unit of nuts.
1 Unit of Bolts
1 Unit of Nuts
Nation L
5 workers
3 workers
Nation W
10 workers
4 workers
The table provided shows the number of workers required in Nation L and Nation W to produce one unit of bolts or one unit of nuts. Which of the following is true?
A
Nation W has an absolute advantage in the production of nuts.
B
Nation L has an absolute advantage in the production of bolts.
C
Nation L does not have an absolute advantage in the production of either nuts or bolts.
D
Nation L has a comparative advantage in the production of nuts.
E
Nation W has a comparative advantage in the production of bolts.
4
IntermediateSection I: Question 4
An economy is experiencing the development and widespread growth of job search websites, which facilitate the matching of job seekers and firms. The growth of these job search sites will likely result in
A
a decrease in the labor force participation rate
B
a decrease in the natural rate of unemployment
C
a decrease in the rate of cyclical unemployment
D
an increase in the rate of structural unemployment
E
an increase in the rate of frictional unemployment
5
IntermediateSection I: Question 5
Which of the following statements is true about cost-push inflation in the short run?
A
It is the self-correcting mechanism during a recession.
B
It is offset by expansionary monetary policies.
C
It occurs when government spending increases.
D
It occurs when resource costs across the economy increase.
E
It results in an increase in real output and employment.
🔒
64 more questions
Create a free account to unlock all 69 questions in this test.
