2{\rtf1\ansi \deff0{\fonttbl{\f0\froman\fcharset0\fprq2 Times New Roman;}{\f1\froman\fcharset2\fprq2 Symbol;}}{\colortbl;\red0\green0\blue0;\red0\green0\blue255;\red0\green255\blue255;\red0\green255\blue0;\red255\green0\blue255;\red255\green0\blue0;\red255\green255\blue0;\red255\green255\blue255;\red0\green0\blue128;\red0\green128\blue0;\red128\green0\blue128;\red128\green0\blue0;\red128\green128\blue0;\red128\green128\blue128;\red192\green192\blue192;}\hyphauto1\deflang1033\margl1800\margr720\margt1440\margb1440\pard\nowidctlpar\hyphpar0\li-1080\ri0\fi0\ql\plain \b \f0\fs26\cf1{Practice Test, The Market for Loanable Funds and Unemployment (Chapters 26 & 28)}\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0\fs36\cf1{\par}\plain \f0\fs36\cf1\pard\nowidctlpar\hyphpar0\li-1080\ri0\fi0\ql\plain \b \f0\fs22\cf1{Multiple Choice}\plain \f0\fs20\cf1{\par

}\plain \f0\fs20\cf1\plain \i \f0\fs22\cf1{Identify the choice that best completes the statement or answers the question.}\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0\fs22\cf1{\par}\plain \f0\fs22\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\plain \b \f0\fs22\cf1{Scenario 26-1.}\plain \f0\fs22\cf1{ Assume the following information for an imaginary, closed economy.\par}\plain \f0\fs22\cf1\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1350\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}{GDP = $110,000; consumption = $70,000; private saving = $8,000; national saving = $12,000.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard

\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0\fs22\cf1{\par}\plain \f0\fs22\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0{____\tab }\plain \f0\fs22\cf1{1.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Scenario 26-1.}\plain \f0\fs22\cf1{ For this economy, investment amounts to\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx2069\clvertalt\cellx2429\clvertalt\cellx4183\clvertalt\cellx4543\clvertalt\cellx6297\clvertalt\cellx6657

\clvertalt\cellx8411\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{$4,000.\cell}{b.}{\cell}{$8,000.\cell}{c.}{\cell}{$12,000.\cell}{d.}{\cell}{$16,000.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{2.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Scenario 26-1.}\plain \f0\fs22\cf1{ This economy\'92

s government is running a\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx4185\clvertalt\cellx4545\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{budget surplus of $4,000.\cell}{c.}{\cell}{budget deficit of $4,000.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx4185\clvertalt\cellx4545\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{budget surplus of $8,000.\cell}{d.}{\cell}{budget deficit of $8,000.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0

\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{3.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Scenario 26-1.}\plain \f0\fs22\cf1{ For this economy, government purchases amount to\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx2069\clvertalt\cellx2429\clvertalt\cellx4183\clvertalt\cellx4543\clvertalt\cellx6297\clvertalt\cellx6657\clvertalt\cellx8411\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{$12,000.\cell}{b.}{\cell}{$18,000.\cell}{c.}{\cell}{$28,000.\cell}{d.}{\cell

}{$40,000.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{4.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Scenario 26-1.}\plain \f0\fs22\cf1{ For this economy, Taxes amount to\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx2069\clvertalt\cellx2429\clvertalt\cellx4183

\clvertalt\cellx4543\clvertalt\cellx6297\clvertalt\cellx6657\clvertalt\cellx8411\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{$16,000.\cell}{b.}{\cell}{$24,000.\cell}{c.}{\cell}{$28,000.\cell}{d.}{\cell}{$32,000.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{5.}{\tab }\plain \f0\fs22\cf1{For an imaginary closed economy, }\plain \i \f0

\fs22\cf1{T}\plain \f0\fs22\cf1{ = $5,000; }\plain \i \f0\fs22\cf1{S}\plain \f0\fs22\cf1{ = $11,000; }\plain \i \f0\fs22\cf1{C}\plain \f0\fs22\cf1{ = $50,000; and the government is running a budget deficit of $1,000. Then\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{private saving = $10,000 and GDP = $54,000.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{private saving = $10,000 and GDP = $58,000.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{private saving = $12,000 and GDP = $67,000.\cell

}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{private saving = $12,000 and GDP = $72,000.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{6.}{\tab }\plain \f0\fs22\cf1{The source of the supply of loanable funds is\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415

\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{saving, and the source of the demand for loanable funds is investment.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{consumption, and the source of the demand for loanable funds is investment.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{investment, and the source of the demand for loanable funds is saving.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{the interest rate, and the source of the demand for loanable funds is saving.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0

\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{7.}{\tab }\plain \f0\fs22\cf1{In the market for loanable funds, the interaction of the demand for, and supply of, loanable funds determines the equilibrium level of\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx4185\clvertalt\cellx4545\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{the inflation rate.\cell}{c.}{\cell}{the real interest rate.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx4185\clvertalt\cellx4545\clvertalt\cellx8415

\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{gross domestic product. \cell}{d.}{\cell}{the nominal interest rate.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{8.}{\tab }\plain \f0\fs22\cf1{Suppose the government changed the tax laws, with the result that people were encouraged to consume more and save less. Using the loanable funds model, a consequence would be\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415

\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{lower interest rates and lower investment.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{lower interest rates and greater investment.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{higher interest rates and lower investment.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{higher interest rates and higher investment.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0

\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{9.}{\tab }\plain \f0\fs22\cf1{According to the loanable funds model, which of the following events would result in higher interest rates and greater saving?\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{Firms become pessimistic about the future and, as a result, they cut back on their plans to buy new equipment and build new factories.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{The government goes from running a budget deficit to running a budget surplus.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415

\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{Congress passes a reform of the tax laws that encourages greater saving.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{Congress passes a reform of the tax laws that encourages greater investment.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0\fs22\cf1{\par}\plain \f0\fs22\cf1\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1350\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\plain \b \f0

\fs22\cf1{Figure 26-1.}\plain \f0\fs22\cf1{\cell}{The figure depicts a demand-for-loanable-funds curve and two \cell}\row\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1350\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}{supply-of-loanable-funds curves.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\dn0 \dn0 {\pict \emfblip \picw7620\pich5504\picwgoal4320\pichgoal3120\picscalex100\picscaley100

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0c000000020000000e00000014000000000000001000000014000000}}\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0\fs22\cf1{\par}\plain \f0\fs22\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0{____\tab }\plain \f0\fs22\cf1{10.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Figure 26-1.}\plain \f0\fs22\cf1{ What is measured along the vertical axis of the graph?\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx4185\clvertalt\cellx4545\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{the nominal interest rate\cell}{c.}{\cell}{the quantity of investment\cell}\row

\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx4185\clvertalt\cellx4545\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{the real interest rate\cell}{d.}{\cell}{the quantity of saving\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{11.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Figure 26-1.}\plain \f0

\fs22\cf1{ Which of the following events would shift the supply curve from S1 to S2?\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{In response to tax reform, firms are tend to invest more than they previously invested.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{In response to tax reform, households are save more than they previously saved.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{Government goes from running a balanced budget to running a budget deficit.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell

}{Any of the above events would shift the supply curve from S1 to S2.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0\fs22\cf1{\par}\plain \f0\fs22\cf1\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1350\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\plain \b \f0\fs22\cf1{Figure 26-2.}\plain \f0\fs22\cf1{\cell}{The figure depicts a supply-of-loanable-funds curve and two \cell}\row\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1350\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0

\ql{\cell}{demand-for-loanable-funds curves.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\dn0 \dn0 {\pict \emfblip \picw7620\pich5768\picwgoal4320\pichgoal3270\picscalex100\picscaley100

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}}\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0\fs22\cf1{\par}\plain \f0

\fs22\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0{____\tab }\plain \f0\fs22\cf1{12.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Figure 26-2.}\plain \f0\fs22\cf1{ Which of the following events would shift the demand curve from D1 to D2?\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{The government goes from running a budget deficit to running a budget surplus.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{Firms become optimistic about the future and, as a result, they plan to increase their purchases of new equipment and construction of new factories.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415

\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{A change in the tax laws encourages people to consume less and save more.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{A change in the tax laws encourages people to consume more and save less.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{13.}{\tab }\plain \f0\fs22\cf1{The amount of unemployment that the economy normally experiences is called the\par

}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx4185\clvertalt\cellx4545\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{average rate of unemployment.\cell}{c.}{\cell}{cyclical rate of unemployment.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx4185\clvertalt\cellx4545\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{natural rate of unemployment.\cell}{d.}{\cell}{typical rate of unemployment.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par

}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{14.}{\tab }\plain \f0\fs22\cf1{The Bureau of Labor Statistics classifies a person as }\plain \i \f0\fs22\cf1{employed}\plain \f0\fs22\cf1{ if he or she\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{is without a job, but is available for work, and has tried to find a job during the previous four weeks.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{works without pay in a family member\'92s business.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315

\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{has been laid off from a job and is waiting to be recalled to the job.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{All of the above are correct.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{15.}{\tab }\plain \f0\fs22\cf1{The Bureau of Labor Statistics classifies a person as }\plain \i \f0

\fs22\cf1{employed}\plain \f0\fs22\cf1{ if he or she\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{has a job but is temporarily absent from the job.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{is self-employed.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{works without pay in a family member\'92s business.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{All of the above are correct.\cell}\row

\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{16.}{\tab }\plain \f0\fs22\cf1{The labor force consists of\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{only those people who are classified as employed.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard

\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{only those people who are classified as employed or unemployed.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{only those people who are classified as employed or unemployed or are full-time students.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{the entire adult population.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0\fs22\cf1{\par}\plain \f0\fs22\cf1\pard\widctlpar\keep\hyphpar0

\li0\ri0\fi0\ql\plain \b \f0\fs22\cf1{Scenario 28-1.}\plain \f0\fs22\cf1{ In an imaginary economy there are 20,000 adults. Of these adults:\par}\plain \f0\fs22\cf1\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1470\clvertalt\cellx1770\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}\plain \f1\fs22\cf1{\'b7}\plain \f0\fs22\cf1{\cell}{8,000 are paid employees;\cell}\row\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1470\clvertalt\cellx1770\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}\plain \f1\fs22\cf1{\'b7}\plain \f0\fs22\cf1{\cell}{1,600 work in their own business;\cell}\row\trowd \trql\trgaph90\trleft-90\trautofit1

\clvertalt\cellx1470\clvertalt\cellx1770\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}\plain \f1\fs22\cf1{\'b7}\plain \f0\fs22\cf1{\cell}{1,000 work as unpaid workers in a family member\'92s business;\cell}\row\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1470\clvmgf\clvertalt\cellx1770\clvmgf\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}\plain \f1\fs22\cf1{\'b7}\plain \f0\fs22\cf1{\cell}{1,400 do not have a job, are available for work, and have tried to find a job within the past four weeks;\cell}\row\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1470\clvmrg\clvertalt\cellx1770\clvmrg\clvertalt

\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}{\cell}{\cell}\row\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1470\clvmgf\clvertalt\cellx1770\clvmgf\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}\plain \f1\fs22\cf1{\'b7}\plain \f0\fs22\cf1{\cell}{780 do not have a job, are available for work, but have not tried to find a job within the past four weeks;\cell}\row\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1470\clvmrg\clvertalt\cellx1770\clvmrg\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}{\cell}{\cell}\row\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1470\clvertalt\cellx1770

\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}\plain \f1\fs22\cf1{\'b7}\plain \f0\fs22\cf1{\cell}{3,000 are full-time students;\cell}\row\trowd \trql\trgaph90\trleft-90\trautofit1\clvertalt\cellx1470\clvertalt\cellx1770\clvertalt\cellx8370\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{\cell}\plain \f1\fs22\cf1{\'b7}\plain \f0\fs22\cf1{\cell}{4,220 are homemakers or retirees.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0

\fs22\cf1{\par}\plain \f0\fs22\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0{____\tab }\plain \f0\fs22\cf1{17.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Scenario 28-1.}\plain \f0\fs22\cf1{ Using the U.S. Bureau of Labor Statistics definitions, how many people in this economy are employed?\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx2069\clvertalt\cellx2429\clvertalt\cellx4183\clvertalt\cellx4543\clvertalt\cellx6297\clvertalt\cellx6657\clvertalt\cellx8411\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{9,600\cell}{b.}{\cell}{10,600\cell}{c.}{\cell}{11,820\cell

}{d.}{\cell}{13,600\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{18.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Scenario 28-1.}\plain \f0\fs22\cf1{ Using the U.S. Bureau of Labor Statistics definitions, how many people in this economy are unemployed?\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx2069\clvertalt

\cellx2429\clvertalt\cellx4183\clvertalt\cellx4543\clvertalt\cellx6297\clvertalt\cellx6657\clvertalt\cellx8411\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{1,400\cell}{b.}{\cell}{2,180\cell}{c.}{\cell}{5,180\cell}{d.}{\cell}{9,400\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{19.}{\tab }\plain \f0

\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Scenario 28-1.}\plain \f0\fs22\cf1{ Using the U.S. Bureau of Labor Statistics definitions, how many people in this economy are in the labor force?\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx2069\clvertalt\cellx2429\clvertalt\cellx4183\clvertalt\cellx4543\clvertalt\cellx6297\clvertalt\cellx6657\clvertalt\cellx8411\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{9,600\cell}{b.}{\cell}{12,000\cell}{c.}{\cell}{12,780\cell}{d.}{\cell}{15,780\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0

\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{20.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Scenario 28-1.}\plain \f0\fs22\cf1{ Using the U.S. Bureau of Labor Statistics definitions, what is this economy\'92s unemployment rate?\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx2069\clvertalt\cellx2429\clvertalt\cellx4183\clvertalt\cellx4543\clvertalt\cellx6297\clvertalt\cellx6657\clvertalt\cellx8411\pard\intbl \widctlpar\keep\hyphpar0

\li0\ri0\fi0\ql{a.}{\cell}{7.00 percent\cell}{b.}{\cell}{11.67 percent\cell}{c.}{\cell}{26.10 percent\cell}{d.}{\cell}{40.00 percent\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{21.}{\tab }\plain \f0\fs22\cf1\plain \b \f0\fs22\cf1{Refer to Scenario 28-1.}\plain \f0\fs22\cf1{ Using the U.S. Bureau of Labor Statistics definitions, what is this economy\'92s labor-force participation rate?\par}\plain \f0

\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx2069\clvertalt\cellx2429\clvertalt\cellx4183\clvertalt\cellx4543\clvertalt\cellx6297\clvertalt\cellx6657\clvertalt\cellx8411\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{45 percent\cell}{b.}{\cell}{53 percent\cell}{c.}{\cell}{60 percent\cell}{d.}{\cell}{75 percent\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080

\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{22.}{\tab }\plain \f0\fs22\cf1{In the United States since about 1950, the labor-force participation rate for women has\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{increased slightly, and for men the labor-force participation rate has remained about constant.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{remained about constant, and for men the labor-force participation rate has decreased significantly.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{increased significantly, and for men the labor-force participation rate has decreased slightly.\cell

}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{increased significantly, as has the labor-force participation rate for men.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{23.}{\tab }\plain \f0\fs22\cf1{Some individuals would like to have a job, but they have given up looking for a job after an unsuccessful search. These individuals are called\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt

\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{structurally-unemployed workers, and they are classified by the Bureau of Labor Statistics as unemployed.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{structurally-unemployed workers, and they are not classified by the Bureau of Labor Statistics as unemployed.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{discouraged workers, and they are classified by the Bureau of Labor Statistics as unemployed.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{discouraged workers, and they are not classified by the Bureau of Labor Statistics as unemployed.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard

\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0\fs22\cf1{24.}{\tab }\plain \f0\fs22\cf1{Minimum-wage laws and unions produce a similar effect in that they both\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{lend credence to theories of efficiency wages.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell

}{contribute to lowering the natural rate of unemployment.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{affect all workers\'92 wages.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{prevent firms from lowering wages in the presence of a surplus of workers.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\widctlpar\keep\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\plain \f0\fs22\cf1{____\tab }\plain \f0

\fs22\cf1{25.}{\tab }\plain \f0\fs22\cf1{In the early 1900s, Henry Ford introduced\par}\plain \f0\fs22\cf1\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{a.}{\cell}{a high-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{b.}{\cell}{a high-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{c.}{\cell}{a low-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory.\cell}\row\trowd \trql\trgaph45\trleft-45\trautofit1\clvertalt\cellx315\clvertalt\cellx8415\pard

\intbl \widctlpar\keep\hyphpar0\li0\ri0\fi0\ql{d.}{\cell}{a low-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory.\cell}\row\pard\widctlpar\keep\hyphpar0\li0\ri0\fi0\ql\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql{\par}\plain \f0\fs22\cf1\page \pard\nowidctlpar\hyphpar0\li-1080\ri0\fi0\ql\plain \b \f0\fs26\cf1{Practice Test, The Market for Loanable Funds and Unemployment (Chapters 26 & 28)\par}\plain \b \f0\fs26\cf1{Answer Section}\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0\fs36\cf1{\par}\plain \f0\fs36\cf1\pard\nowidctlpar\hyphpar0\li-1080\ri0\fi0\ql\plain \b \f0\fs22\cf1{MULTIPLE CHOICE}\plain \f0\fs2\cf1

{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1\plain \f0\fs22\cf1{\par}\plain \f0\fs22\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508{\tab }\plain \f0\fs22\cf1{1.}{\tab }\plain \f0\fs22\cf1{ANS:\tab }\plain \f0\fs22\cf1{C\tab }\plain \f0\fs22\cf1{PTS:\tab }\plain \f0\fs22\cf1{1\tab }\plain \f0\fs22\cf1{DIF:\tab }\plain \f0\fs22\cf1{2\tab }\plain \f0\fs22\cf1{REF:\tab }\plain \f0\fs22\cf1{26-2\par}\plain \f0\fs22\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508{NAT:\tab }\plain \f0

\fs22\cf1{Analytic\tab }\plain \f0\fs22\cf1{LOC:\tab }\plain \f0\fs22\cf1{The study of economics, and definitions of economics\par}\plain \f0\fs22\cf1{TOP:\tab }\plain \f0\fs22\cf1{Identities | National saving | Investment\tab }\plain \f0\fs22\cf1{\tab }\plain \f0\fs22\cf1{MSC:\tab }\plain \f0\fs22\cf1{Applicative}\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508\plain \f0\fs22\cf1{\tab }\plain \f0\fs22\cf1{2.}{\tab }\plain \f0\fs22\cf1{ANS:\tab }\plain \f0\fs22\cf1

{A\tab }\plain \f0\fs22\cf1{PTS:\tab }\plain \f0\fs22\cf1{1\tab }\plain \f0\fs22\cf1{DIF:\tab }\plain \f0\fs22\cf1{2\tab }\plain \f0\fs22\cf1{REF:\tab }\plain \f0\fs22\cf1{26-2\par}\plain \f0\fs22\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508{NAT:\tab }\plain \f0\fs22\cf1{Analytic\tab }\plain \f0\fs22\cf1{LOC:\tab }\plain \f0\fs22\cf1{The study of economics, and definitions of economics\par}\plain \f0\fs22\cf1{TOP:\tab }\plain \f0\fs22\cf1{Identities | Budget surpluses\tab }\plain \f0\fs22\cf1{MSC:\tab }\plain \f0\fs22\cf1{Applicative}\plain \f0\fs2\cf1{\par}\plain \f0\fs2

\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508\plain \f0\fs22\cf1{\tab }\plain \f0\fs22\cf1{3.}{\tab }\plain \f0\fs22\cf1{ANS:\tab }\plain \f0\fs22\cf1{C\tab }\plain \f0\fs22\cf1{PTS:\tab }\plain \f0\fs22\cf1{1\tab }\plain \f0\fs22\cf1{DIF:\tab }\plain \f0\fs22\cf1{2\tab }\plain \f0\fs22\cf1{REF:\tab }\plain \f0\fs22\cf1{26-2\par}\plain \f0\fs22\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508{NAT:\tab }\plain \f0\fs22\cf1{Analytic\tab }\plain \f0

\fs22\cf1{LOC:\tab }\plain \f0\fs22\cf1{The study of economics, and definitions of economics\par}\plain \f0\fs22\cf1{TOP:\tab }\plain \f0\fs22\cf1{Identities | Government purchases\tab }\plain \f0\fs22\cf1{MSC:\tab }\plain \f0\fs22\cf1{Applicative}\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508\plain \f0\fs22\cf1{\tab }\plain \f0\fs22\cf1{4.}{\tab }\plain \f0\fs22\cf1{ANS:\tab }\plain \f0\fs22\cf1{D\tab }\plain \f0\fs22\cf1{PTS:\tab }\plain \f0\fs22\cf1

{1\tab }\plain \f0\fs22\cf1{DIF:\tab }\plain \f0\fs22\cf1{2\tab }\plain \f0\fs22\cf1{REF:\tab }\plain \f0\fs22\cf1{26-2\par}\plain \f0\fs22\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508{NAT:\tab }\plain \f0\fs22\cf1{Analytic\tab }\plain \f0\fs22\cf1{LOC:\tab }\plain \f0\fs22\cf1{The study of economics, and definitions of economics\par}\plain \f0\fs22\cf1{TOP:\tab }\plain \f0\fs22\cf1{Identities | Taxes\tab }\plain \f0\fs22\cf1{\tab }\plain \f0\fs22\cf1{MSC:\tab }\plain \f0\fs22\cf1{Applicative}\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0

\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508\plain \f0\fs22\cf1{\tab }\plain \f0\fs22\cf1{5.}{\tab }\plain \f0\fs22\cf1{ANS:\tab }\plain \f0\fs22\cf1{C\tab }\plain \f0\fs22\cf1{PTS:\tab }\plain \f0\fs22\cf1{1\tab }\plain \f0\fs22\cf1{DIF:\tab }\plain \f0\fs22\cf1{3\tab }\plain \f0\fs22\cf1{REF:\tab }\plain \f0\fs22\cf1{26-2\par}\plain \f0\fs22\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508{NAT:\tab }\plain \f0\fs22\cf1{Analytic\tab }\plain \f0\fs22\cf1{LOC:\tab }\plain \f0

\fs22\cf1{The study of economics, and definitions of economics\par}\plain \f0\fs22\cf1{TOP:\tab }\plain \f0\fs22\cf1{Identities | Gross domestic product\tab }\plain \f0\fs22\cf1{MSC:\tab }\plain \f0\fs22\cf1{Applicative}\plain \f0\fs2\cf1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi0\ql\sa1{\par}\plain \f0\fs2\cf1\pard\nowidctlpar\hyphpar0\li0\ri0\fi-1080\ql\tqr\tx-180\tx0\tx634\tx1958\tx2592\tx3916\tx4550\tx5874\tx6508\plain \f0\fs22\cf1{\tab }\plain \f0\fs22\cf1{6.}{\tab }\plain \f0\fs22\cf1{ANS:\tab }\plain \f0\fs22\cf1{A\tab }\plain \f0\fs22\cf1{PTS:\tab }\plain \f0\fs22\cf1{1\tab }\plain \f0\fs22\cf1

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