Polling_Question_Macro_Econ_2e.pptx

CHAPTER 1:
Welcome to Economics!

c
This file is copyright 2021, Rice University. All Rights Reserved.
Prior to this course, which of the following is closest to the concept you
most associated with the word "economics"?
A. Finance or the stock market
B. Work or job opportunities
C. The overall "health" of the country
D. Producing and purchasing things
E. Trade and international relations
Ch1Q1

c
Consider the circular flow diagram. In your opinion, if a recession
lowered payments from households to firms, what would be the effect
on wages?
A. There would be no effect
B. They would go down
C. They would go up
D. There's no way to tell
Ch1Q2

c
In which type of economy would you rather live?
A. Command Economy
B. Market Economy
C. Traditional Economy
Ch1Q3

c
The study of monetary and fiscal policy are examples of:
A. Macroeconomics
B. Microeconomics
Ch1Q4

c
The study of unemployment is an example of:
A. Macroeconomics
B. Microeconomics
Ch1Q5

c
The study of the housing market in Houston is an example of:
A. Macroeconomics
B. Microeconomics
Ch1Q6

CHAPTER 2:
CHOICE IN A WORLD OF
SCARCITY

c
Which of the following will shift a production-possibilities frontier to the
right?
A. Wants become greater.
B. Either resources increase or technology improves.
C. Unemployment and underemployment are eliminated.
D. People demand more of one good and less of the other.
E. Opportunity costs rise.
Ch2Q1

c
Which of the following terms indicates all the combinations of good A
and good B one can afford given the amount of money they have to
spend and the price of the two goods?
A. Budget Constraint
B. Production Possibilities Frontier (PPF)
C. Allocative Efficiency
D. Opportunity Costs
Ch2Q2

c
Company J produces permanent markers. They decide to increase
their production from 30,000 to 40,000 permanent markers. With this
increase in the number of permanent markers they produce, they incur
greater production expenses and intangible costs. This demonstrates:
A. The Law of Diminishing Returns
B. The Law of Productivity
C. The Law of Increasing Opportunity Cost
D. The Law of Increasing Production
Ch2Q3

c
What does the slope of the production possibilities frontier (PPF) show
us?
A. The Law of Productivity
B. The Opportunity Cost
C. Utility
D. Sunk Costs
Ch2Q4

Ch3Q1
The price of a good rises and so does the quantity sold. These observations are
consistent with:
A. An upward shift of the supply curve.
B. A downward shift of the supply curve.
C. An upward shift of the demand curve.
D. A downward shift of the demand curve.

Ch3Q2
The demand curve is given by P=100 -Q and the supply curve by P=20+4 Q. The
competitive equilibrium Quantity is:
A. Q=80
B. Q=44
C. Q=28
D. Q=20
E. Q=16

Ch3Q3
Suppose the price of raspberries is $10 per pound, but then falls to $8
per pound. The law of demand states that:
A. Demand will rise
B. Demand will fall
C. Quantity demanded will rise
D. Quantity demanded will fall

c
Suppose Noel has three hours of unscheduled time one evening, and is
deciding how to spend it. They rank three choices: (1) Watching a
movie, (2) Attending a basketball game, (3) Working on a paper.
Assume that each activity will take the entire three hours. What is the
opportunity cost of watching a movie?:
A. Attending a basketball game and working on a paper
B. Either attending a basketball game or working on a paper
C. Attending a basketball game
D. Working on a paper
Ch3Q4

c
If both the demand curve and supply curve move to the left, we can
predict:
A. price will fall, but we cannot predict quantity.
B. price will rise, but we cannot predict quantity.
C. quantity will rise, but we cannot predict price.
D. quantity will fall, but we cannot predict price.
Ch3Q5

c
What is the best example of a complementary good to hamburgers?
A. Fried chicken
B. Beef
C. French fries
D. Donuts
Ch3Q6

c
An increase in the price of chicken feed shifts the supply curve for eggs
to the left and moves buyers along the demand curve. In the jargon of
economics, we have had a change in:
A. supply and a change in quantity demanded.
B. supply and a change in demand.
C. quantity supplied and a change in quantity demanded.
D. quantity supplied and a change in demand.
Ch3Q7

c
Suppose that both the price of gasoline and the amount of gasoline
sold decline. Which of the following would account for this?
A. A shift left of the demand curve, but no change in the supply curve
B. A shift right of the demand curve, but no change in the supply curve
C. A shift left of the supply curve, but no change in the demand curve
D. A shift right of the supply curve, but no change in the demand curve
Ch3Q8

c
When more buyers enter a market, prices tend to :
A. Decrease
B. Remain the Same
C. Increase
Ch3Q9

CHAPTER 4:
LABOR AND FINANCIAL
MARKETS

c
If the quantity of loans given and received goes down, what can we
assume about the preceding changes in the financial market?
A. rising demand
B. falling demand
C. rising supply
D. falling supply
Ch4Q1

c
What will a price ceiling usually shift?
A. Supply
B. Demand
C. Both
D. Neither
Ch4Q2

c
What will shift the demand curve for high-skill labor to the right:
A. A reduction in companies
B. Increased input costs
C. The technology substitute
D. The technology complement
Ch4Q3

c
At equilibrium:
A. Quantity supplied and quantity demanded are equal
B. Supply and demand are equal
C. There is an excess supply of labor in the market
D. There is an excess demand or shortage in the market
Ch4Q4

c
Terri's Tacos finds that no matter how much it sells, its marginal
revenue is always $3.50. This constant marginal revenue tells us that
the elasticity of its demand curve is:
A. Infinity
B. 3.5
C. 1
D. 0
Ch5Q1

c
An economic consultant tells their client that their product is an inferior
good. By this, what do they most likely mean about the product's
elasticity?
A. It has an income elasticity greater than zero.
B. It has an income elasticity less than zero
C. It has a price elasticity of supply greater than one.
D. It as a price elasticity of supply less than one.
Ch5Q2

c
If demand is price elastic, then:
A. a rise in price will raise total revenue.
B. a fall in price will raise total revenue.
C. a fall in price will lower the quantity demanded.
D. a rise in price won't have any effect on total revenues.
Ch5Q3

c
It is reasonable to expect the cross price elasticity of demand for tennis
rackets and tennis balls to be positive:
A. True
B. False
Ch5Q4

CHAPTER 6:
THE MACROECONOMIC
PERSPECTIVE

c
Real GDP measures:
A. current output at current prices.
B. current output at base year prices.
C. base year output at current prices.
D. base year output at current exchange rates.
Ch6Q1

c
What will a rise in population do to per capita GDP?
A. It will raise it.
B. It will lower it.
C. It will either raise or lower it.
D. It will have no effect.
Ch6Q2

c
If the analysts at the Federal Reserve are verifying the impact of
inflation on GDP, which type of GDP are they likely calculating?
A. Potential GDP
B. Nominal GDP
C. Real GDP
D. Forecasted GDP
Ch6Q3

c
Using the formula for GDP increase calculations below, answer the
following question:
Formula: GDP at starting date × (1 + growth rate of GDP)years = GDP
at end date
Country A has a starting GDP of 300 and grows at a rate of 4%.
Country B has a starting GDP of 350 and grows at a rate of 2%.
After 10 years, which country would have a higher GDP?
A. Country A
B. Country B
Ch7Q1

c
After an election, a new political administration takes power in a low-
income country with little infrastructure and educational institutions. The
prime minister and chief economic advisors believe that human capital
deepening is key to economic growth. With this idea in mind, if they
wanted to achieve the highest possible level of economic growth in 10
years, what should they do?
A. Invest in infrastructure.
B. Build schools and universities
C. Send young adults to elite foreign schools.
D. Encourage foreign investment into their country.
Ch7Q2

c
After an election, a new political administration takes power in a low-
income country with little infrastructure and educational institutions. The
prime minister and chief economic advisors believe that physical capital
deepening is key to economic growth. With this idea in mind, if they
wanted to achieve the highest possible level of economic growth in 15
years, what should they do?
A. Invest in infrastructure.
B. Build schools and universities
C. Send young adults to elite foreign schools.
D. Encourage foreign investment into their country.
Ch7Q3

c
If the Department of Labor determines that structural unemployment is
rising quickly, and the department wants to reduce the level, in what
type of programs would it be most likely to invest?
A. Grant programs to states for road and energy infrastructure construction.
B. Government sponsored research and development projects to spur
innovation
C. Increased unemployment benefits
D. Grant programs to colleges to develop technology training programs
Ch8Q1

c
Why would a company that went through a financial downturn decide to
lay off some workers rather than introduce a small wage reduction
across the company?
A. Wage reductions are an unfair practice and would invite scrutiny from the
Department of Labor or related organizations.
B. The company would have a hard time hiring new workers after it cut the
wages.
C. After a wage reduction, the best workers would depart for better options,
leaving the company with less productive workers.
D. Longer term, the laid off workers would gain a better salary at their new
employers because they hadn’t reduced their ending wage.
Ch8Q2

c
Overall, which of the following countries is most likely in a better
economic position?
A. A country with low unemployment and a relatively high number of people
out of the labor force.
B. A country with a relatively high unemployment and a low number of people
out of the labor force?
Ch8Q3

c
What is a key assumption of the consumer price index?
A. It assumes that people will always switch to products with reduced prices.
B. It assumes that new products will fail.
C. It assumes that purchase quantity of a product remains consistent month-to-
month.
D. It assumes that price increases due to product improvement are
inconsequential.
Ch9Q1

c
If the Consumer Price Index changes from 108 in year one to 135 in
year two, what was rate of inflation over the year between the
measurements?
A. 10 percent
B. 15 percent
C. 20 percent
D. 25 percent
E. 30 percent
Ch9Q2

c
If a government placed price caps or otherwise prevented prices from
rising due to inflation, what would be a likely negative outcome?
A. Runaway deflation
B. Surpluses of goods
C. Shortages of goods
D. Decreased trade
Ch9Q3

CHAPTER 10:
THE INTERNATIONAL
TRADE AND CAPITAL
FLOWS

c
If a country's GDP is $890 billion and its exports are $340 billion, what
is its export ratio?
A. 26%
B. 38%
C. 44%
D. 52%
Ch10Q1

c
Which of the following represents a flow away from the U.S. economy?
A. The sale of U.S. coal to China to resell it to Indonesia
B. A Spanish firm winning a bidding war against a U.S. firm to purchase a
building in Chicago.
C. Altering the formula of a soft drink to sell it in Southeast Asia
D. A U.S company inventing a product and having it manufactured in
Madagascar for resale in the U.S.
Ch10Q2

c
A country experiencing a current account surplus:
A. Needs to borrow internationally.
B. Is able to lend internationally.
C. Must also have had a surplus in its capital account.
D. Spent more than it earned on its merchandise and service trade,
international income payments and receipts and international transfers.
Ch10Q3

CHAPTER 11:
THE AGGREGATE
DEMAND/AGGREGATE
SUPPLY MODEL

c
Which of the following does not affect long-run aggregate supply?
A. changes in production methods.
B. changes in financial capital
C. changes in number of workers
D. changes in the price level
Ch11Q1

c
The long-run aggregate supply curve will shift to the right if
A. population decreases is a decrease in population.
B. the economy experiences industrial improvements
C. inflation skyrockets
D. exports decrease.
Ch11Q2

c
How do falling interest rates affect aggregate demand and equilibrium
price level in the short run?
A. Aggregate demand will rise, the equilibrium price level will fall.
B. Aggregate demand will rise, the equilibrium price level will rise.
C. Aggregate demand will fall, the equilibrium price level will fall.
D. Aggregate demand will fall, the equilibrium price level will rise.
Ch11Q3

c
If aggregate demand falls, what would happen to GDP output and
prices.
A. Output would fall and prices would rise
B. Output would fall and prices would fall
C. It is impossible to tell.
Ch11Q4

CHAPTER 12:
THE KEYNESIAN
PERSPECTIVE

c
In what situation would an increase in government spending result in
inflation?
A. When real GDP is to the left of potential GDP on the AD curve.
B. When real GDP is to the right of potential GDP on the AD curve
C. When the government spending took place in a recession.
D. When the government spending took place as the economy was expanding.
Ch12Q1

c
According to the Keynesian perspective, what is the primary
determinant of aggregate output and overall prices?
A. Government investment
B. Balance of trade
C. Aggregate supply
D. Aggregate demand
Ch12Q2

c
What would be an appropriate fiscal policy to combat inflation?
A. Increase regulations
B. Provide stimulus payments directly to citizens
C. Expand public works programs
D. Increase taxes
Ch12Q3

CHAPTER 13:
THE NEOCLASSICAL
PERSPECTIVE

c
Which employment policy is most likely to be supported by neoclassical
economists?
A. An increase in taxes on corporations
B. A stimulus program for corporations
C. A safety net program that pays more if you can prove you are looking for
work.
D. A safety net program that increases payment for each child over 10
Ch13Q1

c
What result do neoclassical economists expect from a rise in
aggregate demand?
A. Lower prices
B. Higher prices
C. Lower output
D. Higher output
Ch13Q2

c
According to neoclassical economists, what is the barrier to
government action on fiscal relief?
A. International trade
B. No correlation between unemployment and inflation
C. Flexible prices
D. Consumer behavior
Ch13Q3

c
If someone receives $50 in cash as a graduation present and puts it
into a savings account, what is the impact on M1 and M2?
A. They both decrease
B. M1 decreases, M2 increases
C. M1 decreases, M2 stays the same
D. M1 stays the same, M2 increases
CH14Q1

c
A bank has $5 million in assets, and receives a deposit of $1 million. If
the reserve requirement is 5%, how much can the bank now lend out?
A. $3,000,000
B. $300,000
C. $5,500,000
D. $5,700,000
Ch14Q2

c
A bank has $10 million in assets. If the reserve requirement is 5%, how
much money does the bank create if it lends out half of its assets?
A. $50,000,000
B. $95,000,000
C. $100,000,000
D. $115,000,000
Ch14Q3

CHAPTER 15:
MONETARY POLICY AND
BANK REGULATION

c
What tactic might the Federal Reserve use to increase the money
supply?
A. increase the discount rate
B. issue Treasury securities for purchase
C. increase the required reserve ratio
D. lower income taxes
Ch15Q1

c
What is the effect of the Fed purchasing Treasury bonds?
A. higher reserves and more loans issued by banks
B. higher reserves and fewer loans issued by banks
C. lower reserves and more loans issued by banks
D. lower reserves and fewer loans issued by banks
Ch15Q2

c
If the Fed increases the funds rate, which tool is it using?
A. Discount Rate
B. Open Market Operations
C. Reserve Requirements
Ch15Q3

CHAPTER 16:
EXCHANGE RATES AND
INTERNATIONAL CAPITAL

c
Which of the following should cause the Kenyan currency -- the shilling
-- to appreciate?
A. An issue with the reliability of Kenyan exports
B. Kenyan workers in neighboring countries are increasing the amount of
money they send to families in Kenya.
C. Repayment by the Kenyan government of its debt to another country.
D. Increased imports of Nigerian oil into Kenya
Ch16Q1

c
Which of the following assets would be included in a measure of
purchasing power parity?
A. Parcels of land
B. Corporate stocks
C. Treasury bonds
D. Hours of labor
E. Units of microchips
Ch16Q2

c
Suppose the average price of 2-liter bottle of Coke in the United States
is $3.00 while in Nigeria the average price is 1400 naira. If the price of a
dollar is 400 naira per dollar, the purchasing power parity model of
exchange rate determination suggests:
A. Compared to US dollars, the naira is undervalued
B. Compared to US dollars, the naira is overvalued
C. The price of Coke in Nigeria will go up
D. The price of Coke in the US will go down
Ch16Q3

CHAPTER 17:
GOVERNMENT BUDGETS
AND FISCAL POLICY

c
When the economy remains lower than potential real GDP, which
policy would bring it back to LRAS?
A. Increasing the money supply
B. Reducing oil supply
C. Increasing taxes
D. Increasing government purchases.
Ch17Q1

c
What is most likely to lead to expansionary fiscal policy?
A. Plummeting gasoline prices
B. Decreasing consumer product supply
C. Lower investment spending
D. Increasing exports
Ch17Q2

c
If prices and wages were not sticky, what would be the effect of an
increase in government spending?
A. Production output and prices would increase.
B. Production output would increase, but prices would remain unchanged.
C. Production output would not change, and prices would increase.
D. Production output and prices would decrease.
Ch17Q3

CHAPTER 18:
THE IMPACTS OF
GOVERNMENT BORROWING

c
From the perspective of the U.S., what is another word for inflows of savings
from foreign economies?
A. corporate assets
B. private investment
C. trade surpluses
D. trade deficits
Ch18Q1

c
What results in financial capital leaving the economy?
A. increased corporate assets
B. decrease private investment
C. trade surpluses
D. trade deficits
Ch18Q2

c
In what situation would an expansionary monetary policy result in
interest rate reduction?
A. In no situation.
B. If the expansion occurs while the budget deficit is increasing
C. If the expansion occurs while the budget deficit is decreasing
Ch18Q3

CHAPTER 19:
MACROECONOMIC POLICY
AROUND THE WORLD

c
What is the impact of capital outflows on the exchange rate of a small
economy?
A. It would increase
B. It would decrease
C. It would not change
Ch19Q1

c
Recessions in high-income countries lead to:
A. their recategorization as low-income countries
B. a fall in GDP
C. cyclical unemployment
D. inflation
Ch19Q2

c
European unemployment rates are typically _____ U.S. rates.
A. approximately the same as
B. Lower than
C. higher than
Ch19Q3

CHAPTER 20:
INTERNATIONAL TRADE

c
Mexico can produce 100 kg of bananas or 60 kg of tomatoes. Canada
can produce 80 kg of wheat or 40 kg of flax. How can you describe the
nations’ opportunity cost related to the products mentioned?
A. Mexico’s opportunity cost for producing bananas is lower than Canada’s
opportunity cost to product wheat.
B. Mexico’s opportunity cost for producing bananas is greater than Canada’s
opportunity cost to product wheat.
C. There is not enough information to answer.
Ch20Q1

c
The United States produces 100 pounds of soybeans or 20 barrels of
oil. In trade with Oman, if the United States exports 500 pounds of
soybeans, how many barrels of oil must it import to gain from trade?
A. At least 40 barrels
B. At least 50 barrels
C. At least 100 barrels
D. At least 200 barrels
Ch20Q2

c
Consider the following table. If the quantity demanded is 22,000 units,
can the economy take full advantage of economics of scale?
A. Yes
B. No
C. There is not enough information
Ch20Q3
Quantity of Solar Panels Average Total Cost
5000 $120 each
10000 $85 each
15000 $63 each
20000 $51 each
30000 $51 each
40000 $51 each

CHAPTER 21:
GLOBALIZATION AND
PROTECTIONISM

c
Domestic tobacco has long benefited from protectionism. A tariff on
foreign tobacco would have which of the following effects?
A. It would hurt domestic tobacco users but help domestic tobacco producers.
B. It would hurt both domestic tobacco users and producers, but the outcome
would be a net benefit due to the reduced externality of healthcare costs,
loss of life, and loss of productivity.
C. It would help domestic tobacco users but hurt domestic producers.
D. It would help both domestic tobacco users and producers.
Ch21Q1

c
Which U.S. industry would most likely rationalize newly enacted
protectionism from the infant industry argument?
A. Cell phones
B. Solar panels
C. Driverless cars
D. Gaming consoles
Ch21Q2

c
Additive manufacturing (also known as industry-level 3D printing) is a critical
new industry, sometimes labeled as part of the Fourth Industrial Revolution.
One particular application and innovation is in supply chain: Instead of
building a product or part in one location and shipping it across the country,
it can be printed at the factory where it will be used, reducing costs and
increasing flexibility.
In this particular industry, why would protectionism benefit BOTH domestic
consumers and domestic producers?
A. Both producers and consumers would benefit from time without too many options
in the market. Producers need the time to integrate the new technology, and
consumers need very narrow choices to learn how to use the technology.
B. Producers would benefit from the reduced foreign competition. Consumers will
benefit from having the time without too many products in the market in order to
understand the options and value.
C. Producers would benefit from the reduced foreign competition. Consumers will
benefit from increased flexibility and lower costs.
Ch21Q3

c
TEXT
A.
B.
C.
D.
QUESTION TEMPLATE
Ch#Q#

Polling_Question_Macro_Econ_2e.pptx

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