Question 1

Which of the following is a normative statement?

Accepted Answer

A)  "Income inequality in the United States has increased." 
B)  "The Federal Reserve has observed that the rate of inflation has been increasing." 
C)  "The government should increase the minimum wage to help low-income groups." 
D)  "Real wages in many cities have decreased over time." 
E)  "The relative price of gasoline has remained low in the past 30 years." 
A)  "Income inequality in the United States has increased." 
B)  "The Federal Reserve has observed that the rate of inflation has been increasing." 
C)  "The government should increase the minimum wage to help low-income groups." 
D)  "Real wages in many cities have decreased over time." 
E)  "The relative price of gasoline has remained low in the past 30 years."

Question 2

The ceteris paribus assumption is always used whenever an economist analyzes the relationship of two variables.

Accepted Answer

A) True 
 B)False

Question 3

Economists are likely to evaluate the impacts of rising gasoline prices through the use of

Accepted Answer

A)  outdated models with new applications. 
B)  models that are not relevant to the health-care industry. 
C)  existing models that are useful for explaining observations. 
D)  models that are useful only for exposition in economics textbooks. 
E)  new models with old data. 
A)  outdated models with new applications. 
B)  models that are not relevant to the health-care industry. 
C)  existing models that are useful for explaining observations. 
D)  models that are useful only for exposition in economics textbooks. 
E)  new models with old data.

Question 4

Economic data always give an accurate picture of what affects consumers.

Accepted Answer

A) True 
 B)False

Question 5

Karl Marx argued that capitalism would eventually collapse and give rise to a new economic system, which is called

Accepted Answer

A)  a political system. 
B)  socialism. 
C)  a market system. 
D)  a laissez faire system. 
E)  a mixed economy. 
A)  a political system. 
B)  socialism. 
C)  a market system. 
D)  a laissez faire system. 
E)  a mixed economy.

Question 6

Exhibit 2-3  
-In Exhibit 2-3, an example of a constant would be

Accepted Answer

A)  the quantity of coffee supplied. 
B)  the price that corresponds to any quantity of coffee supplied. 
C)  the price of coffee. 
D)  the slope of the line. 
E)  both the price and quantity of coffee. 
A)  the quantity of coffee supplied. 
B)  the price that corresponds to any quantity of coffee supplied. 
C)  the price of coffee. 
D)  the slope of the line. 
E)  both the price and quantity of coffee.

Question 7

If two variables are correlated, then it must be true that one of the variables causes the other.

Accepted Answer

A) True 
 B)False

Which of the following is a normative statement?

The ceteris paribus assumption is always used whenever an economist analyzes the relationship of two variables.

Economists are likely to evaluate the impacts of rising gasoline prices through the use of

Economic data always give an accurate picture of what affects consumers.

Karl Marx argued that capitalism would eventually collapse and give rise to a new economic system, which is called

Exhibit 2-3 -In Exhibit 2-3, an example of a constant would be

If two variables are correlated, then it must be true that one of the variables causes the other.

The Central Idea

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

Deriving the Formula for the Keynesian Multiplier and the Forward-Looking Consumption Model

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Capital and Financial Markets

Economic Growth and Globalization

International Trade

International Finance

Reading, Understanding, and Creating Graphs

the Miracle of Compound Growth

Present Discounted Value

Deriving the Growth Accounting Formula

Filters

Exam 2: Observing and Explaining the Economy

Which of the following is a normative statement?

The ceteris paribus assumption is always used whenever an economist analyzes the relationship of two variables.

Economists are likely to evaluate the impacts of rising gasoline prices through the use of

Economic data always give an accurate picture of what affects consumers.

Karl Marx argued that capitalism would eventually collapse and give rise to a new economic system, which is called

Exhibit 2-3 -In Exhibit 2-3, an example of a constant would be

If two variables are correlated, then it must be true that one of the variables causes the other.

The Central Idea

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

Deriving the Formula for the Keynesian Multiplier and the Forward-Looking Consumption Model

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Capital and Financial Markets

Economic Growth and Globalization

International Trade

International Finance

Reading, Understanding, and Creating Graphs

the Miracle of Compound Growth

Present Discounted Value

Deriving the Growth Accounting Formula

Filters