Increases in capital:

a.are made possible by increasing current consumption

b.lead to increases in per capita Real GDP

c.are made possible by saving

d.Both b. and c. above

Technological advance can result from:

a.improved capital

b.improved production techniques

c.restrictions on international trade

d.Both a. and b. above

If the exchange rate for the U.S. dollar depreciates:

a.U.S. exports will be more expensive

b.U.S. net exports will increase

c.Both of the above

d.Neither of the above

Free international trade:

a.hinders technological advance

b.benefits special-interest groups at the expense of economic growth

c.Both of the above

d.Neither of the above

Compared to Country B, Country A is at an absolute disadvantage in producing all goods. Therefore:

a.Country A and Country B will not be able to trade with each other

b.Country A will be at a comparative disadvantage in all goods

c.Country A can still have a comparative advantage in producing some goods

d.Both a. and b. above

The federal personal income tax:

a.is a regressive tax

b.is the largest source of federal tax revenue

c.Both of the above

d.Neither of the above

A large government hinders economic growth because:

a.a large government necessitates high tax rates

b.governments generally use resources less efficiently than the private sector

c.a large government decreases the opportunity for rent seeking

d.Both a. and b. above

The burden of deficit spending falls on future generations:

a.to the extent that deficit spending favors investment rather than consumption

b.to the extent that the deficit spending is financed by foreign creditors

c.Both of the above

d.Neither of the above

Frdric Bastiat's "Petition of the Candlemakers":

a.is a fictitious petition by the candlemakers for protection from unfair competition

b.is a satirical attack on trade restrictions

c.Both of the above

d.Neither of the above

When a trade restriction is imposed on an imported good:

a.the nation imposing the trade restriction suffers a net economic loss

b.a loss is imposed on foreign producers

c.Both of the above

d.Neither of the above

To minimize the deadweight loss, a tax should:

a.be broad-based

b.have low rates

c.Both of the above

d.Neither of the above

Loopholes:

a.reduce the tax base

b.mean that lower tax rates can be imposed to collect the same amount of tax revenue

c.Both of the above

d.Neither of the above

Deficit spending:

a.increases the government's demand for loanable funds, driving up interest rates

b.causes higher interest rates, which crowd out investment

c.reduces present investment, which leads to slower economic growth in the future

d.All of the above

The social security system:

a.encourages retirement

b.redistributes income from groups with a shorter average life expectancy to groups with a longer average life expectancy

c.Both of the above

d.Neither of the above

Over the last couple of decades:

a.there has been a movement toward restricting international trade

b.average tariff rates have been rising

c.international trade has declined in importance

d.None of the above

A stable price level:

a.depends on proper monetary policy

b.requires extensive use of price controls

c.Both of the above

d.Neither of the above