Question 1

After new HUD guidelines were issued in 1999, Freddie Mac and Fannie Mae

Accepted Answer

A)  extended fewer loans to borrowers making a down payment of 5 percent or less. 
B)  extended more loans to borrowers making a down payment of 5 percent or less. 
C)  extended new loans only to borrowers making a down payment of at least 20 percent. 
D)  refused to extend new loans without full verification that the borrower had prime credit status. 
A)  extended fewer loans to borrowers making a down payment of 5 percent or less. 
B)  extended more loans to borrowers making a down payment of 5 percent or less. 
C)  extended new loans only to borrowers making a down payment of at least 20 percent. 
D)  refused to extend new loans without full verification that the borrower had prime credit status.

Question 2

Which of the following would tend to increase the value of a future stream of income?

Accepted Answer

A)  an increase in the rate of inflation 
B)  an increase in the interest rate 
C)  a reduction in the interest rate 
D)  a reduction in the size of the expected future income 
A)  an increase in the rate of inflation 
B)  an increase in the interest rate 
C)  a reduction in the interest rate 
D)  a reduction in the size of the expected future income

Question 3

The opportunity costs of policies to slow global warming under the Kyoto Protocol would include

Accepted Answer

A)  fuel-use reductions that would slow economic growth in most of the world. 
B)  economizing on energy use in ways that would, on balance, increase economic growth. 
C)  very few costs that would affect resource-conserving industrial nations such as the United States. 
D)  high costs in developing nations such as India but not in industrial nations. 
A)  fuel-use reductions that would slow economic growth in most of the world. 
B)  economizing on energy use in ways that would, on balance, increase economic growth. 
C)  very few costs that would affect resource-conserving industrial nations such as the United States. 
D)  high costs in developing nations such as India but not in industrial nations.

Question 4

Because the demand for a broadly defined product line (automobiles, for example) is less elastic than the demand for a more narrow product category (Fords, for example), a union will be better able to raise wages without large unemployment effects when

Accepted Answer

A)  it has organized an entire industry rather than only one firm. 
B)  it organizes only a few firms in each industry. 
C)  it bargains with all firms in a narrow product line but ignores the rest of the industry. 
D)  only a small part of the industry that makes the broadly defined product is unionized. 
A)  it has organized an entire industry rather than only one firm. 
B)  it organizes only a few firms in each industry. 
C)  it bargains with all firms in a narrow product line but ignores the rest of the industry. 
D)  only a small part of the industry that makes the broadly defined product is unionized.

Question 5

An increase in the percentage of the labor force that is unionized will cause average wages for all workers to rise because

Accepted Answer

A)  union labor is more productive. 
B)  profit levels are lowered to increase wages. 
C)  strike threats promote wage increases. 
D)  This is a trick question because greater unionization does not imply higher average wages. 
A)  union labor is more productive. 
B)  profit levels are lowered to increase wages. 
C)  strike threats promote wage increases. 
D)  This is a trick question because greater unionization does not imply higher average wages.

Question 6

Which of the following countries had the highest level of government expenditures as a share of GDP in 2007?

Accepted Answer

A)  Ireland 
B)  United States 
C)  Sweden 
D)  Australia 
A)  Ireland 
B)  United States 
C)  Sweden 
D)  Australia

Question 7

An analysis of large declines in the stock market since the Great Depression indicates that

Accepted Answer

A)  the stock market crash in October 1929 was more severe than subsequent crashes. 
B)  a prolonged recession will always follow a large decline in the stock market. 
C)  almost all stock market crashes since the Great Depression were followed by short recessions of 12 to 18 months, and in some cases, no recession at all. 
D)  the only way to recover from a stock market crash is through government spending, increased regulation, and tax-increases. 
A)  the stock market crash in October 1929 was more severe than subsequent crashes. 
B)  a prolonged recession will always follow a large decline in the stock market. 
C)  almost all stock market crashes since the Great Depression were followed by short recessions of 12 to 18 months, and in some cases, no recession at all. 
D)  the only way to recover from a stock market crash is through government spending, increased regulation, and tax-increases.

Question 8

Traditionally, men have been more willing to accept jobs that

Accepted Answer

A)  required continuous employment in the labor force. 
B)  require relocation if necessary to get a higher paying job. 
C)  have long working hours. 
D)  All of the above are correct. 
A)  required continuous employment in the labor force. 
B)  require relocation if necessary to get a higher paying job. 
C)  have long working hours. 
D)  All of the above are correct.

Question 9

The growth of third-party payments (payments by insurers and the government) of healthcare services during the last four decades has been accompanied by

Accepted Answer

A)  a reduction in expenditures on healthcare as a share of the economy. 
B)  an increase in the sensitivity of consumers to the prices of healthcare services. 
C)  persistent increases in the prices of healthcare services and rapid growth in the total expenditures on healthcare. 
D)  an increase in the incentive of suppliers to provide healthcare services at a low cost. 
A)  a reduction in expenditures on healthcare as a share of the economy. 
B)  an increase in the sensitivity of consumers to the prices of healthcare services. 
C)  persistent increases in the prices of healthcare services and rapid growth in the total expenditures on healthcare. 
D)  an increase in the incentive of suppliers to provide healthcare services at a low cost.

Question 10

Measured as a share of GDP, the total government expenditures of the United States are

Accepted Answer

A)  larger than any country in the world. 
B)  smaller than any country in the world. 
C)  smaller than the comparable figure for Japan and most Western European countries. 
D)  larger than the comparable figure for Japan and most Western European countries. 
A)  larger than any country in the world. 
B)  smaller than any country in the world. 
C)  smaller than the comparable figure for Japan and most Western European countries. 
D)  larger than the comparable figure for Japan and most Western European countries.

Question 11

During the last two decades, the number of women preparing for careers as professionals has ____, and the proportion of those completing college degrees has ____.

Accepted Answer

A)  increased; decreased 
B)  increased; increased 
C)  decreased; decreased 
D)  decreased; increased 
A)  increased; decreased 
B)  increased; increased 
C)  decreased; decreased 
D)  decreased; increased

Question 12

Which of the following would increase the incentive of healthcare consumers to economize and help reduce the future growth of healthcare prices in the United States?

Accepted Answer

A)  an increase in the share of healthcare costs paid for either directly or from personal medical savings accounts 
B)  subsidies that would encourage consumers to purchase low co-payment insurance plans 
C)  a new government program that would cover the cost of prescription drugs purchased by all healthcare consumers 
D)  a reduction in the eligibility age for the coverage of Medicare from 65 to 55 years of age 
A)  an increase in the share of healthcare costs paid for either directly or from personal medical savings accounts 
B)  subsidies that would encourage consumers to purchase low co-payment insurance plans 
C)  a new government program that would cover the cost of prescription drugs purchased by all healthcare consumers 
D)  a reduction in the eligibility age for the coverage of Medicare from 65 to 55 years of age

Question 13

In 2010, how many states permitted public school choice in some or all school districts?

Accepted Answer

A)  10 
B)  30 
C)  40 
D)  45 
A)  10 
B)  30 
C)  40 
D)  45

Question 14

Water supply problems are generally the result of

Accepted Answer

A)  missing or incomplete markets for water. 
B)  too much trading of water. 
C)  too few government subsidies to desalination. 
D)  all of the above. 
A)  missing or incomplete markets for water. 
B)  too much trading of water. 
C)  too few government subsidies to desalination. 
D)  all of the above.

Question 15

A school voucher program targeted towards low- and middle-income families would cause

Accepted Answer

A)  racial and economic segregation among schools to rise. 
B)  per-pupil funding in the public schools to fall. 
C)  salaries for outstanding teachers to rise. 
D)  competition between public and private schools to fall. 
A)  racial and economic segregation among schools to rise. 
B)  per-pupil funding in the public schools to fall. 
C)  salaries for outstanding teachers to rise. 
D)  competition between public and private schools to fall.

Question 16

Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused

Accepted Answer

A)  housing prices to fall during that period. 
B)  a reduction in the use of adjustable rate mortgages to finance the purchase of housing. 
C)  a reduction in housing construction during 2002-2005. 
D)  mal-investment, that is, excessive investment in housing construction during 2002-2005. 
A)  housing prices to fall during that period. 
B)  a reduction in the use of adjustable rate mortgages to finance the purchase of housing. 
C)  a reduction in housing construction during 2002-2005. 
D)  mal-investment, that is, excessive investment in housing construction during 2002-2005.

Question 17

The experience of the Teamsters in the late 1970s and early 1980s suggests that

Accepted Answer

A)  there are few restraints on the ability of a strong union to increase the wages of its members. 
B)  product market competition with goods made from (or services provided by) nonunion labor significantly limits the ability of a union to get increased wages for its members. 
C)  higher wages tend to stimulate aggregate demand, which makes it easier for a union to gain still higher wages. 
D)  wages are established by the relative skill of union and management negotiators, independent of market conditions. 
A)  there are few restraints on the ability of a strong union to increase the wages of its members. 
B)  product market competition with goods made from (or services provided by) nonunion labor significantly limits the ability of a union to get increased wages for its members. 
C)  higher wages tend to stimulate aggregate demand, which makes it easier for a union to gain still higher wages. 
D)  wages are established by the relative skill of union and management negotiators, independent of market conditions.

Question 18

How much does it cost to tax a dollar of revenue away from the private sector and transfer it to the government to finance a government program?

Accepted Answer

A)  one dollar 
B)  less than one dollar because the administration of and compliance with the tax laws creates jobs for people 
C)  more than a dollar because collection of the taxes requires resources that would otherwise be available for private sector production 
D)  more than a dollar because of the excess burden resulting from the elimination of productive exchanges by the taxes 
E)  Both c and d are correct. 
A)  one dollar 
B)  less than one dollar because the administration of and compliance with the tax laws creates jobs for people 
C)  more than a dollar because collection of the taxes requires resources that would otherwise be available for private sector production 
D)  more than a dollar because of the excess burden resulting from the elimination of productive exchanges by the taxes 
E)  Both c and d are correct.

Question 19

Which of the following is most likely to occur if a union can transfer profits from a unionized employer to union workers?

Accepted Answer

A)  The investment expenditures of the unionized employer will tend to fall. 
B)  Employment in the nonunion sector will tend to fall. 
C)  The costs of the unionized employer will tend to fall. 
D)  The output of the unionized employer will tend to increase. 
A)  The investment expenditures of the unionized employer will tend to fall. 
B)  Employment in the nonunion sector will tend to fall. 
C)  The costs of the unionized employer will tend to fall. 
D)  The output of the unionized employer will tend to increase.

Question 20

High marginal tax rates, such as those instituted during the Great Depression, will

Accepted Answer

A)  increase the incentive of people to earn. 
B)  lead to a proportional increase in tax revenue and a reduction in the size of the budget deficit. 
C)  cause people to work, earn, and invest less than would be the case if marginal tax rates were lower. 
D)  attract workers from other countries where tax rates are lower. 
A)  increase the incentive of people to earn. 
B)  lead to a proportional increase in tax revenue and a reduction in the size of the budget deficit. 
C)  cause people to work, earn, and invest less than would be the case if marginal tax rates were lower. 
D)  attract workers from other countries where tax rates are lower.

After new HUD guidelines were issued in 1999, Freddie Mac and Fannie Mae

Which of the following would tend to increase the value of a future stream of income?

The opportunity costs of policies to slow global warming under the Kyoto Protocol would include

Because the demand for a broadly defined product line (automobiles, for example) is less elastic than the demand for a more narrow product category (Fords, for example), a union will be better able to raise wages without large unemployment effects when

An increase in the percentage of the labor force that is unionized will cause average wages for all workers to rise because

Which of the following countries had the highest level of government expenditures as a share of GDP in 2007?

An analysis of large declines in the stock market since the Great Depression indicates that

Traditionally, men have been more willing to accept jobs that

The growth of third-party payments (payments by insurers and the government) of healthcare services during the last four decades has been accompanied by

Measured as a share of GDP, the total government expenditures of the United States are

During the last two decades, the number of women preparing for careers as professionals has , and the proportion of those completing college degrees has .

Which of the following would increase the incentive of healthcare consumers to economize and help reduce the future growth of healthcare prices in the United States?

In 2010, how many states permitted public school choice in some or all school districts?

Water supply problems are generally the result of

A school voucher program targeted towards low- and middle-income families would cause

Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused

The experience of the Teamsters in the late 1970s and early 1980s suggests that

How much does it cost to tax a dollar of revenue away from the private sector and transfer it to the government to finance a government program?

Which of the following is most likely to occur if a union can transfer profits from a unionized employer to union workers?

High marginal tax rates, such as those instituted during the Great Depression, will

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Filters

Exam 16: Applying the Basics: Special Topics in Economics

After new HUD guidelines were issued in 1999, Freddie Mac and Fannie Mae

Which of the following would tend to increase the value of a future stream of income?

The opportunity costs of policies to slow global warming under the Kyoto Protocol would include

Because the demand for a broadly defined product line (automobiles, for example) is less elastic than the demand for a more narrow product category (Fords, for example), a union will be better able to raise wages without large unemployment effects when

An increase in the percentage of the labor force that is unionized will cause average wages for all workers to rise because

Which of the following countries had the highest level of government expenditures as a share of GDP in 2007?

An analysis of large declines in the stock market since the Great Depression indicates that

Traditionally, men have been more willing to accept jobs that

The growth of third-party payments (payments by insurers and the government) of healthcare services during the last four decades has been accompanied by

Measured as a share of GDP, the total government expenditures of the United States are

During the last two decades, the number of women preparing for careers as professionals has ____, and the proportion of those completing college degrees has ____.

Which of the following would increase the incentive of healthcare consumers to economize and help reduce the future growth of healthcare prices in the United States?

In 2010, how many states permitted public school choice in some or all school districts?

Water supply problems are generally the result of

A school voucher program targeted towards low- and middle-income families would cause

Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused

The experience of the Teamsters in the late 1970s and early 1980s suggests that

How much does it cost to tax a dollar of revenue away from the private sector and transfer it to the government to finance a government program?

Which of the following is most likely to occur if a union can transfer profits from a unionized employer to union workers?

High marginal tax rates, such as those instituted during the Great Depression, will

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Filters

During the last two decades, the number of women preparing for careers as professionals has , and the proportion of those completing college degrees has .