QUESTION 25 Public unions have more bargaining power than private unions because

Question

QUESTION 25

Public unions have more bargaining power than private unions because the goods and services they represent face

an elastic demand curve.

an inelastic demand curve.

a horizontal supply curve.

a vertical demand curve.

2 points   

QUESTION 26

Which of the following events happened in ancient Rome?

The government financed a large army and embarked on expensive public works projects.

The government encouraged tax evasion by raising taxes and discouraged entrepreneurship.

The government caused high rates of inflation by increasing the money supply and debasing the currency.

The government attempted to fix prices by edict which led to shortages and hoarding.

All of the above.

2 points   

QUESTION 27

In 1971, President Richard Nixon told a national television audience that the gold standard, or what little of it remained, was no longer in operation.

True

False

2 points   

QUESTION 28

President Nixon imposed wage price controls in 1971, ran budget deficits, and announced he was a Keynesian.

True

False

2 points   

QUESTION 29

The practice of rent seeking fosters favoritism in Congress.

True

False

2 points   

QUESTION 30

Trade restrictions can be imposed by which of the following methods?

Tariffs can be imposed on certain goods from stipulated countries.

Quotas can be imposed on selected goods coming in from foreign countries.

Countries can agree to orderly marketing arrangements among themselves.

All of the above.

2 points   

QUESTION 31

Inflation has no compassion because it affects the weaker element of society the most.

True

False

2 points   

QUESTION 32

Inflation eventually leads to unemployment because it erodes consumer's buying power.

True

False

2 points   

QUESTION 33

Let's suppose you market a new product. If you charge too low a price, you will have a surplus.

True

False

2 points   

QUESTION 34

According to Richard Duncan, author of The New Depression, in 1971 a new economic paradigm took shape when economic growth took a back seat to credit creation and consumption.

True

False

2 points   

QUESTION 35

Let's suppose you market a new product. If you charge too high of a price, you will have a surplus.

True

False

2 points   

QUESTION 36

Which of the following statements is true concerning escalator clauses?

They should not be permanent.

They can blur the price signals between buyers and sellers.

They can hamper a healthy and growing economy over the long haul.

All of the above.

2 points   

QUESTION 37

With high and unanticipated rates of inflation price signals are distorted, uncertainty replaces certainty, indecision replaces decisiveness, and confusion sets in as the future becomes uncertain.

True

False

2 points   

QUESTION 38

According to Richard Duncan, in his book The New Depression, we can no longer pay off our national debt without more money creation.

True

False

2 points   

QUESTION 39

Which of the following is a possible result of a wage-price freeze?

Prices can increase more after the freeze because sellers tend to expect future freezes.

Prices are not allowed to increase.

Wages are not allowed to increase.

All of the above.

2 points   

QUESTION 40

The Consumer Price Index (CPI) only measures the price change of a particular basket of goods and services.

True

False

2 points   

QUESTION 41

Something is considered scarce when

it is rare and hard to come by.

there is not enough of it to go around to everyone who wants it at the going price.

there is not enough of something to go around for everyone who wants it at a zero price.

there are relatively few available anywhere in the world.

2 points   

QUESTION 42

Not all prices increases are inflationary.

True

False

2 points   

QUESTION 43

If there is a decline in productivity, the economy can experience cost-push inflation.

True

False

2 points   

QUESTION 44

Inflation can cause problems if it is too high, especially when the price increase is erratic and unanticipated.

True

False

2 points   

QUESTION 45

The Petrodollar System began in the 1970s when Saudi Arabia agreed to accept only American dollars for oil payments.

True

False

2 points   

QUESTION 46

Everything has value according to its level of usefulness and scarcity in the market.

True

False

2 points   

QUESTION 47

Borrowers are always hurt more by inflation than lenders.

True

False

2 points   

QUESTION 48

The Petrodollar system

pegged the value of the U.S. dollar to $35 per ounce of gold.

established the International Monetary System (IMF) as a method to facilitate world trade.

established the World Bank so that all nations could freely trade among one another.

established a dollar for oil arrangement with Saudi Arabia and other oil-producing nations.

2 points   

QUESTION 49

Which of the following factors influences the price level?

The money supply.

A change in Q which is Gross Domestic Product.

The velocity of money.

All of the above.

2 points   

QUESTION 50

Which of the following is a true statement?

Countries can engage in a currency war by each country doing what it can to lower the value of its currency.

By a country taking action to reduce the value of its currency, it can encourage an increase in its exports.

Neither a or b are true statements.

Both a and b are true statements.

a.

an elastic demand curve.

b.

an inelastic demand curve.

c.

a horizontal supply curve.

d.

a vertical demand curve.

Explanation / Answer

Ans)

25.

b. an inelastic demand curve

Public sector employees do not have a very high labor to capital substitutability.

26.

e.

All of the above.

27.

TRUE

In 1971 President Richard Nixon ended the convertibility of dollar into Gold hence endin the system of Gold standard.

28.

TRUE

President Nixon imposed a wage price FReeze,ran large budget Deficits and declared himself a Keynesian in 1971.

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