Multiple Choice Answers

1. Which statement is TRUE: a. The U.S is both the world’s leading creditor nation and the leading debtor nation b. The US is neither the world’s leading creditor nation nor the world’s leading debtor nation. c. The U.S is the world’s leading creditor nation and not the world’s leading debtor nation d. The U.S is the world’s leading debtor nation and not the world’s leading creditor nation

2. Lorenz curves tell us about the: a. Absolute distribution of income b. Relative distribution if income c. Incidence of malnutrition d. Poverty line

3. How does a decrease in supply affect equilibrium price and quantity? a. A decrease in supply leads to a lower equilibrium price and a lower equilibrium quantity. b. A decrease in supply leads to a lower equilibrium prince and a higher equilibrium quantity c. A decrease in supply leads to a higher equilibrium price and a lower equilibrium quantity d. A decrease I supply leads to a higher equilibrium prince and a higher equilibrium quantity.

4. I n general, ______________ by unanticipated inflation. a. Creditors and debtors are both helped b. Creditors and debtors are both hurt c. Creditors are helped and debtors are hurt d. Creditors are hurt and debtors are helped

5. Each of the following is an indirect tax Except the ___________ tax. a. Gasoline b. Telephone c. Corporate income d. Excise

6. Say’s Law: a. Was a basic pillar of classical economics b. Was a basic pillar of Keynesian economics c. Was formulated during the Great Depression d. Proves that we can never have full employment

7. Barter Transactions a. Involve directly exchanging goods for other goods b. Can occur without the double coincidence of wants c. Are less costly than transactions involving money d. Involve the use of money as a medium of exchange

8. Gross saving is the total of __________ saving. a. Personal and business b. Personal and government c. Business and government d. Personal, business and government

9. John Maynard Keynes noted that a. We could print all the money we want and still have scarcity b. To secure the greatest amount of pleasure with the least possible outlay should be the aim of all economic effort. c. The general notion that scarcity is due to not having enough money is an illusion d. Both a and c

10. Each of the following were elements of the New Dear Except: a. Relief, recovery and reform b. A massive employment program c. Unemployment insurance and bank deposit insurance d. A balanced budget