If the Federal Reserve creates new money to finance the government's deficit, then it is monetizing the deficit.(True/False)

If the Federal Reserve creates new money to finance the government's deficit, then it is monetizing the deficit.(True/False)

Answer: True

If the current price is above equilibrium price in a competitive market, we should expect a shortage of the product.(True/False)

If the current price is above equilibrium price in a competitive market, we should expect a shortage of the product.(True/False)

Answer: False

Any time the government sets an artificially low price for a product, it increases the possibility of a shortage of that product.(True/False)

Any time the government sets an artificially low price for a product, it increases the possibility of a shortage of that product.(True/False)

vTrue

In cost-push inflation, prices go up because of higher cost of production.(True/False)

In cost-push inflation, prices go up because of higher cost of production.(True/False)

Answer: True

When the Federal Reserve lowers the reserve requirement, the amount of money in circulation should tend to decrease.(True/False)

When the Federal Reserve lowers the reserve requirement, the amount of money in circulation should tend to decrease.(True/False)

Answer: False

A study of United States imports and exports shows that most of the United States' negative balance of trade is caused by imports of oil and automobiles.(True/False)

A study of United States imports and exports shows that most of the United States' negative balance of trade is caused by imports of oil and automobiles.(True/False)

Answer: True

"Dumping" is selling products to foreign countries for less than the price charged.(True/False)

"Dumping" is selling products to foreign countries for less than the price charged.(True/False)

Answer: False

U.S. businesses were the first to start the trend toward multinational corporations.(True/False)

U.S. businesses were the first to start the trend toward multinational corporations.(True/False)

Answer: True

Import quotas are no longer permitted under GATT.(True/False)

Import quotas are no longer permitted under GATT.(True/False)

Answer: True

Recession is a lesser form of inflation.(True/False)

Recession is a lesser form of inflation.(True/False)

Answer: False

Prices help to determine the opportunity cost of a purchase.(True/False)

Prices help to determine the opportunity cost of a purchase.(True/False)

Answer: True

The equilibrium price is where supply and demand curves intersect.(True/False)

The equilibrium price is where supply and demand curves intersect.(True/False)

Answer: True

More than half of every sales dollar goes to profits.(True/False)

More than half of every sales dollar goes to profits.(True/False)

Answer: False

Practical economists would order antipollution or clean-up measures only when the gains fro reduces pollution damage exceeded the cost of cleaning up or preventing that amount of pollution.(True/False)

Practical economists would order antipollution or clean-up measures only when the gains fro reduces pollution damage exceeded the cost of cleaning up or preventing that amount of pollution.(True/False)

Answer: True

Higher GNP figures resulting form inflation do not represent an increase in output.(True/False)

Higher GNP figures resulting form inflation do not represent an increase in output.(True/False)

Answer: True

Political freedom and economic freedom are unrelated.(True/False)

Political freedom and economic freedom are unrelated.(True/False)

Answer: False

Interest on a bond must be paid whether the issuing corporation makes a profit or not.(True/False)

Interest on a bond must be paid whether the issuing corporation makes a profit or not.(True/False)

Answer: True

A mutual fund is a single investment made and managed by one individual.(True/False)

A mutual fund is a single investment made and managed by one individual.(True/False)

Answer: False

According to the Taft-Hartley Act, the president may delay a strike for 80days if it is harmful to the nation's safety and health.(True/False)

According to the Taft-Hartley Act, the president may delay a strike for 80days if it is harmful to the nation's safety and health.(True/False)

Answer: True

Prices are an ineffective way to deal with scarcity.(True/False)

Prices are an ineffective way to deal with scarcity.(True/False)

Answer: False