Economincs MT 445 Practice Exam

| August 14, 2017

1.In the United States and in most European countries, aging populations and decliningbirthrates threaten public finances. As the population ages, there are fewer workerspaying taxes relative to the number of retired people receiving government benefits.Which of the following government policies would NOT help reduce the pressure onpublic finances?(Points:1)offer financial incentives to increase the birthratereduce taxes paid by current workers so that they an save for their futurereduce retiree benefit paymentsraise the retirement age2.Inthe first six months of 2003, branches of Commerce Bank in New York City wererobbed 14 times. The New York City Police recommended steps the bank could take todeter robberies, including the installation of plastic barriers called "bandit barriers." Thepolice were surprised the bank did not take their advice. According to a deputycommissioner of police, "Commerce does very little of what we recommend. They’vetold our detectives they have no interest in ever putting in the barriers."It would seem that Commerce bank would have a strong incentive to install "banditbarriers" to deter robberies. Why wouldn’t they do it? (Points:1)The banks would rather delay installation of any theft deterring equipment in anticipationof new lower cost innovations in the security devices market.The banks must have weighed the cost of installing bandit barriers against the benefitsand decided that they have "no interest in ever putting in the barriers".The banks are concerned that "bandit barriers" would send the wrong message tocustomers — that the bank is unsafe.The banks probably resent any interference from the police department.3.Cassie’sQuilts alters, reconstructs and restores heirloom quilts. Cassie has just spent$800purchasing, cleaning and reconstructing an antique quilt which she expects to sell for$1,500 once she is finished. After having spent $800, Cassie discovers that she wouldneed some special period fabric that would cost her $200 in material and time in orderto complete the task. Alternatively, she can sell the quilt "as is" now for $900. What isthe marginal cost of completing the task?(Points:1)$200$500$1,000$1,000 plus the value of her time4.Theterm "market" in economics refers to(Points:1)a place where money changes hands.a legal institution where exchange can take place.a group of buyers and sellers of a product and the arrangement by which they cometogether to organization which sells goods and services.5.Therevenue received from the sale of an additional unit of a product (Points:1)is a marginal benefit to the called called gross called a net gain.6.Table 2-3Table 2-3 shows the number of labor hours required to produce a digital camera and apound of wheat in China and South Korea.Refer to Table 2-3. China has a comparative advantage in (Points : 1)both products.wheat camera production.neither product.7.Theproduction possibilities frontier model shows that (Points:1)if consumers decide to buy more of a product its price will increase.a market economy is more efficient in producing goods and services than is a centrallyplanned economy.economic growth can only be achieved by free market economies.if all resources are fully and efficiently utilized, more of one good can be produced onlyby producing less of another good.8.Which(Points:1)of the following countries does not come close to the free market benchmark?The United StatesJapanCubaFrance9.In2002, BMW made a tactical decision to use a robot to attach the gearbox to theengines of its vehicles instead of using two workers as it had done previously. The robotmethod had a higher cost but installed the gearbox in exactly the right position. Inmaking this decision, BMW (Points:1)faced no tradeoffs because the robot method increased efficiency.faced a tradeoff between higher cost and lower precision (in installing the gearbox inexactly the right position).adopted a negative technological change because it replaced workers with robots.eroded some of its competitiveness in the luxury car market because of its increasedcost of production.10.Asuccessful market economy requires well defined property rights and (Points:1)balanced supplies of all factors of independent court system to adjudicate disputes based on the law.detailed government regulations.a safety net to ensure that those who cannot participate in the market economy can earnan income.11.Amajor factor contributing to the slow growth rate of less developed economies is(Points:1)the lack of well-defined and enforceable property rights.the lack of natural resources.the lack of workers.the high rate of illiteracy.12.Whichof the following would cause both the equilibrium price and equilibriumquantity of barley (assume that barley is an inferior good) to increase? (Points:1)An increase in consumer income.A drought that sharply reduces barley output.A decrease in consumer income.Unusually good weather that results in a bumper crop of barley.13.Table 3-1Refer to Table 3-1. The table above shows the demand schedules for loose-leaf tee oftwo individuals (Sunil and Mia) and the rest of the market. If the price of loose-tea raisesfrom $3 to $4 the market quantity demanded would (Points : 1)decrease by 32 pounds.increase by 64 pounds.increase by 32 pounds.decrease by 64 pounds.14.Ifthe quantity demanded for a product exceeds the quantity supplied the marketprice will rise until(Points:1)the quantity demanded equals the quantity supplied. The product will then no longer bescarce.quantity demanded equals quantity supplied. The equilibrium price will then be greaterthan the market price.only wealthy consumers will be able to afford the product.quantity demanded equals quantity supplied. The market price will then equal theequilibrium price.15.Whatis the difference between an "increase in supply" and an "increase in quantitysupplied"?(Points:1)There is no difference between the two terms; they both refer to a shift of the supplycurve.There is no difference between the two terms; they both refer to a movement along agiven supply curveAn "increase in supply" means the supply curve has shifted to the right while an"increase in quantity supplied" means at any given price supply has increased.An "increase in supply" means the supply curve has shifted to the right while an"increase in quantity supplied" refers to a movement along a given supply curve inresponse to an increase in price.16.Figure 3-4Refer to Figure 3-4. The figure above represents the market for canvas tote bags.Compare the conditions in the market when the price is $50 and when the price is $35.Which of the following describes how the market differs at these prices? (Points : 1)At each price there is a surplus; the surplus is greater at $35 than at $50.The difference between quantity supplied and quantity demanded is greater at $50 thanat $35.At each price there is a surplus; firms will lower the equilibrium price in order to eliminatethe surplus.At each price the supply of tote bags exceeds that demand for tote bags.17.Brettbuys a new cell phone for $100. He receives consumer surplus of $80 from thepurchase. How much does Brett value his cell phone? (Points:1)$180$100$80$2018.Thedifference between the highest price a consumer is willing to pay for a good andthe price the consumer actually pays is called(Points:1)producer surplus.the substitution effect.the income effect.consumer surplus.19.Figure 4-5Refer to Figure 4-5. The figure above represents the market for iced tea. Assume thatthis is a competitive market. If 20,000 units of iced tea are sold (Points : 1)the deadweight loss is equal to economic surplus.producer surplus equals consumer surplus.the marginal benefit of each of the 20,000 units of iced tea equals $3.marginal benefit is equal to marginal cost.20.Economicsurplus(Points:1)does not exist when a competitive market is in equal to the sum of consumer surplus and producer the difference between quantity demanded and quantity supplied when the marketprice for a product is greater than the equilibrium equal to the difference between consumer surplus and producer surplus.21.Figure 4-9Figure 4-9 shows the market for cigarettes. The government plans to impose a unit taxin this market.Refer to Figure 4-9. What is the size of the unit tax? (Points : 1)$8$5$3Cannot be determined from the figure.22.Supposethe demand curve for a product is downward sloping and the supply curveis upward sloping. If a unit tax is imposed in the market for this product, (Points:1)sellers bear the entire burden of the tax.the tax burden will be shared among the government, buyers and sellers.buyers bear the entire burden of the tax.the tax burden will be shared by buyers and sellers.23.Whichof the following would result in a lower absolute value of the price elasticity ofdemand for a product?(Points:1)wide variety of substitutes available for the goodshort time period consideredthe good is a luxury itemthe expenditure on the good large relative to one’s budget24.Ifthe percentage change in price is 20 percent and the value of the price elasticity ofdemand is -5, then quantity demanded (Points:1)will increase by 100 percent.will increase by 5 percent.will decrease by 100 percent.impossible to determine without additional information.25.Whendemand is unit price elastic, a change in price causes total revenue to stay thesame because(Points:1)the percentage change in quantity demanded exactly offsets the percentage change inprice.buyers are buying the same revenue never changes with price changes.the change in profit is offset by the change in production cost.26.Which(Points:1)of the following statements about the price elasticity of demand is correct?The elasticity of demand for a good in general is equal to the elasticity of demand for aspecific brand of the good.The absolute value of the elasticity of demand ranges from zero to one.Demand is more elastic in the long run than it is in the short run.Demand is more elastic the smaller percentage of the consumer’s budget the item takesup.27.Theprice elasticity of the supply of teenage labor services is approximately 1.36.Suppose the minimum wage rises from $6.60 per hour to $7.00. Using the midpointformula, calculate the approximately change in the will the quantity supplied of teenagelabor. (Points:1)5.9 percent13.6 percent8 percentThere is insufficient information to answer the question.28.Afirm has successfully adopted a positive technological change when (Points:1)it can produce more output using the same produces less pollution in its production process.can pay its workers less yet increase its sees an increase in worker productivity.29.Referto Figure 10-5. Identify the minimum efficient scale of production.(Points:1)QaQbQcQd30.Figure 10-7Refer to Figure 10-7. The lines shown in the diagram are isocost lines. Which of thefollowing shows an increase in the firm’s total cost budget while the price of labor andcapital remain unchanged? (Points : 1)the movement from CE to BFthe movement from CE to AFthe movement from BD to AFthe movement from BD to CE31.Table 10-2Table 10-2 shows cost data for Lotus Lanterns, a producer of whimsical night lights.Refer to Table 10-2. What is the average variable cost per unit of production when thefirm produces 90 lanterns? (Points : 1)$490$33.67$7.67$5.4032.Whatis the difference between "diminishing marginal returns" and "diseconomies ofscale"? (Points:1)Both concepts explain why marginal cost increases after some point but diminishingmarginal returns applies only in the short run when there is at least one fixed factor,while diseconomies of scale applies in the long run when all factors are variable.Both concepts explain why average total cost increases after some point but diminishingmarginal returns applies only in the short run when there is at least one fixed factor,while diseconomies of scale applies in the long run when all factors are variable.Diminishing marginal returns which applies only in the short run, when at least one factoris fixed, explains why marginal cost increases, while diseconomies of scale whichapplies in the long run, when all factors are variable, explains why average costincreases.Diminishing marginal returns which applies only in the short run, when at least one factoris fixed, explains why average variable cost increases, while diseconomies of scalewhich applies in the long run, when all factors are variable, explains why average totalcost increases.33.Thepresident of Toyota’s Georgetown plant was quoted as saying, "Demand for highvolumes saps your energy. Over a period of time, it eroded our focus [and] thinned outthe expertise and knowledge we painstakingly built up over the years." This quotesuggests that(Points:1)Toyota was experiencing an excess demand for its automobiles which it had difficultykeeping up Toyota expanded its capacity, it experienced diseconomies of scale.Toyota was focused on "churning" out cars that it did not invest sufficiently in training itsworkers.high demand for Toyota’s cars prevented the company from focusing on its strength:auto design.34.Figure 11-1Refer to Figure 11-1. If the firm is producing 200 units, (Points : 1)it breaks is making a should cut back its output to maximize should increase its output to maximize profit.35.Thedemand for each seller’s product in perfect competition is horizontal at themarket price because(Points:1)each seller is too small to affect market price.the price is set by the government.all the sellers get together and set the price.all the demanders get together and set the price.36.Marketsupply is found by(Points:1)vertically summing the relevant part of each individual producer’s marginal cost curve.horizontally summing the relevant part of each individual producer’s marginal cost curve.vertically summing each individual producer’s average total cost curve.horizontally summing each individual producer’s average total cost curve.37.Whichof the following describes a situation in which a good or service is produced atthe lowest possible cost?(Points:1)productive efficiencyallocative efficiencymarginal efficiencyprofit maximization38.Figure 11-5Figure 11-5 shows cost and demand curves facing a typical firm in a constant-costperfectly competitive industry.Refer to Figure 11-5. What is the minimum price the firm requires to produce output?(Points : 1)$20$14$5It cannot be determined39.Apossible advantage of a horizontal merger for the economy is that (Points:1)the merging firms could avoid losses.the merged firm might reap economies of scale which could translate into lower prices.the degree of competition in the industry will be intensified.the government stands to collect more corporate income tax revenue.40.Amerger between the Ford Motor Company and General Motors would be anexample of a(Points:1)vertical merger.horizontal merger.conglomerate 14-8In 2006 the California government changed its regulatory policy to allow competitioninto the cable television market. Figure 14-8 shows the cable television market inCalifornia.Refer to Figure 14-8. Following the policy change, the subscription price falls from PMto Pc. What is the increase in consumer surplus as a result of this change? (Points : 1)the area A+B+Cthe area B+Cthe area D+Fthe area B+C+D42.TheAluminum Company of America (Alcoa) had a monopoly until the 1940s because(Points:1)it was a public had a patent on the manufacture of aluminum.the company had a secret technique for making aluminum from had control of almost all available supply of bauxite.43.Ifa theatre company expects $250,000 in ticket revenue from five performances and288,000 in ticket revenue if it adds a sixth performance, the (Points:1)marginal revenue of the sixth performance is $48,000.marginal revenue of the sixth performance is $38,000.cost of staging the sixth performance is probably higher than the cost of staging theprevious will be making a loss on the sixth performance because its ticket sales will beless than average received from the previous five.44.Figure 14-7Figure 14-7 shows the cost and demand curves for the Erickson Power Company.Refer to Figure 14-7. Why won’t regulators require that Erickson Power produce theeconomically efficient output level? (Points : 1)because there is insufficient demand at that output levelbecause at the economically efficient output level, the marginal cost of producing the lastunit sold exceeds the consumers’ marginal value for that last unitbecause Erickson Power will earn zero profitbecause Erickson Power will sustain persistent losses and will not continue in businessin the long run.45.Inthe long run, if price is less than average cost, (Points:1)there is an incentive for firms to exit the market.there is profit incentive for firms to enter the market.the market must be in long-run equilibrium.there is no incentive for the number of firms in the market to change.46.Table 12-2Eco Energy is a monopolistically competitive producer of a sports beverage calledPower On. Table 12-2 shows the firm’s demand and cost schedules.Refer to Table 12-2. What is the maximum output (Q) that maximizes profit and what isthe price (P) charged? (Points : 1)P=$55; Q=5 casesP=$50; Q=6 casesP=$45; Q=7 casesP=$40; Q=8 cases47.Ifa monopolistically competitive firm breaks even, the firm (Points:1)is earning an accounting profit and will have to pay taxes on that earning zero accounting and zero economic profit.should advertise its product to stimulate demand.expand production.48.Longrun equilibrium under monopolistic competition is similar to that under perfectcompetition in that(Points:1)firms produce at the minimum point of their average cost curves.price equals marginal cost.firms earn normal profits.price equals marginal revenue.49.Youhave just opened a new Italian restaurant in your hometown where there arethree other Italian restaurants. Your restaurant is doing a brisk business and youattribute your success to your distinctive northern Italian cuisine using locally grownorganic produce. What is likely to happen to your business in the long run? (Points:1)Your competitors are likely to change their menus to make their products more similar toyours.Your success will invite others to open competing restaurants and ultimately your profitswill be driven to zero.If your success continues, you will be likely to establish a franchise and expand yourmarket size.If you continue to maintain consistent quality, you will be able to earn profits indefinitely.50.OPECperiodically meets to agree to restrict the cartel’s oil output, and yet almostevery member of OPEC produces more than its own output quota. This suggests thatOPEC has a(Points:1)cooperative equilibrium.noncooperative potential entrants.threat of substitute goods.51.Whatis a prisoners’ dilemma? (Points:1)a game that involves no dominant strategiesa game in which prisoners are stumped because they cannot communicate with eachothera game in which players act in rational, self-interested ways that leave everyone worseoffa game in which players collude to outfox authorities52.Considertwo oligopolistic industries selling the same product in different locations. Inthe first industry, firms always match price changes by any other firm in the industry. Inthe second industry, firms always ignore price changes by any other firm. which of thefollowing statements is true about these two industries, holding everything elseconstant?(Points:1)Market prices are likely to be higher in the first industry in which firms always matchprice changes by rival firms than in the second where firms ignore their rivals’ pricechanges.Market prices are likely to be lower in the first industry where firms always match pricechanges by rival firms than in the second where firms ignore their rivals’ price changes.Market prices are likely to be the same in both markets because they are botholigopolistic markets.No conclusions can be drawn about the pricing behavior under these very different firmbehavior.53.Whydoes a prisoners’ dilemma lead to a noncooperative equilibrium? (Points:1)because each player had agreed before the game started to minimize the harm that hecan inflict on the other playersbecause each player is uncertain how other players will play the gamebecause players must choose from have a limited number of non-dominant strategiesbecause each rational player has a dominant strategy to play a certain way regardless ofwhat other players do54.TheDeBeers Company of South Africa was able to block competition through (Points:1)economies of scale.ownership of an essential input.government-imposed barriers.differentiating its product.55.Untilthe late 1990s, airlines would post proposed changes in ticket prices oncomputer reservations systems several days before the new ticket prices went intoeffect. Then the federal government took action to end the practice. Now airlines canonly post prices on their reservations systems for tickets that are immediately availablefor sale.Source: Scott McCartney, "Airfare Wars Show Why Deals Arrive and Depart," Wall Street Journal, March19, 2002.Why would the federal government object to the old system of posting prices beforethey went into effect? (Points : 1)because it is a form of price discrimination in that consumers who need to travelimmediately are subject to different fares compared to those who will travel at a laterdate when the price changes go into effectbecause it is essentially a form of price signaling; airlines try to determine the reaction ofcompetitors before committing to a price changebecause it creates chaos in the air travel market: if an airline plans to cut fares, thenconsumers are likely to postpone purchases but if an airline plans to increase fares, thena shortage will result.because it makes it more difficult for airlines to agree on ticket price changes and likelyto spark an airfare war56.Demandin factor markets differs from demand in product markets in that (Points:1)the demand for a factor of production is difficult to determine.the demand for a factor of production is influenced by workers’ productivity and by theproducers’ expected sales revenues, not by tastes and preferences of consumers.demand for a factor of production is based on the tastes and preferences of firms.demand for a factor of production is based on the tastes and preferences of resourceowners.57.Painterswho paint water towers earn higher wages relative to painters who painthouses because(Points:1)the demand for tower painters is greater than the demand for residential painters.painting water towers is more risky than painting houses.the tower painters’ union is probably more powerful than the wall painters’ union.the supply of water tower painters exceeds the supply of wall painters.58.Accordingto the signaling hypothesis, (Points:1)signaling about job openings occur in help wanted classified ads.a college diploma signals to employers that a person has certain desirablecharacteristics.a slowdown in output signals to companies the need to hire more labor.a high unemployment rate is a signal to the government to take some policy action.59.Customerdiscrimination occurs when(Points:1)a firm pays workers different wages based on irrelevant factors.customers refuse to buy products produced by a racially diverse workforce.customers refuse to buy products they believe to be of poor quality.workers refuse to serve customers of a different race.60.Supposea competitive firm is paying a wage of $12 an hour and sells its product at$3 per unit. Assume that labor is the only input. If, hiring another worker would increaseoutput by three units per hour, then to maximize profits the firm should (Points:1)not change the number of workers it currently hires.not hire an additional worker.hire another worker.There is not enough information to answer the question.61.Table 16-2Refer to Table 16-2. What is the profit-maximizing quantity of labor that the firm shouldhire? (Points : 1)5 units$4 units$3 units2 units62.Adecrease in the wage rate causes(Points:1)an increase in the quantity of labor demanded.a rightward shift of the firm’s labor demand curve.a leftward shift of the firm’s labor demand curve.a decrease in labor’s productivity.63.Considerthis quote from an article in the Wall Street Journal: "The stock of educatedworkers isn’t increasing fast enough to keep up with rising demand. ……. Employers arepaying the typical four-year college graduate [without graduate school] 75% more thanthey pay high-school grads. Twenty-five years ago, they were paying 40% more.Employers insist on ever better-educated, skilled workers. "Source: David Wessel, "Lack of Well-Educated Workers Has Lots of Roots, No Quick Fix", Wall StreetJournal, April 19, 2007, Page A2.Which of the following best explains the rapid increase in the wage differential betweencollege graduates and high school graduates? (Points : 1)The demand for college educated workers shifted to the right while the supply of collegeeducated workers shifted to the left.The supply of high-school educated workers shifted to the right faster than the demandfor college educated workers shifted to the right.The demand for college educated workers shifted to the right faster than the supply ofcollege educated workers shifted to the right.The demand for high-school educated workers shifted to the left faster than the supply ofcollege educated workers shifted to the right.64.Economicdiscrimination takes place when an employer (Points:1)pays workers the lowest wage possible.pays workers different wages on the basis of some arbitrary characteristics of workersthat are irrelevant to the job performed.pays lower wages to workers who are not as productive as other workers.pays workers compensating wage differentials.65.Supposea competitive firm is paying a wage of $12 an hour and sells its product at$3 per unit. Assume that labor is the only input. If the last worker hired increases outputby three units per hour, then to maximize profits the firm should (Points:1)not change the number of workers it currently hires.lay off some of its workers.hire additional workers.There is not enough information to answer the question.66.Scenario:In academia, professors in some disciplines receive higher salaries thanothers. For example, professors teaching in business schools receive higher salariesthan professors in the English department. Suppose in Unity College, assistantprofessors in the business school earn $Wb while assistant professors in the Englishdepartment earn $We < Wb. Now suppose the government passes comparable worthlegislation that requires academic institutions to pay all faculty the same salaries.Following the passage of comparable worth legislation, Unity College responds byplacing salaries at $Wa between the two existing salaries. Which of the following is theresult of the legislation?(Points:1)The supply of English professors increase and the supply of business professorsdecrease.The demand for English professors decrease and the demand for business professorsincrease.There will be a surplus in the market for English professors and a shortage in the marketfor business professors.There will be a surplus in the market for English professors and the market for businessprofessors will not be affected.67.Grossdomestic product understates the total production of final goods and servicesbecause of the omission of(Points:1)exports.inflation.intermediate goods.nonmarket household production.68.Ifprices in the economy rise, then(Points:1)the purchasing power of a dollar rises.the purchasing power of a dollar stays constant.the purchasing power of a dollar declines.the purchasing power of a dollar cannot be determined.69.Table 19-5Consider the table above showing three stages of production of an automobile.Refer to Table 19-5. The value added by the automobile dealer equals (Points : 1)$7,000.$15,000.$18,000.$25,000.70.Theoutput of Mexican citizens who work in Texas would be included in the (Points:1)gross domestic product of Mexico.gross national product of Mexico.gross national product of the United national product of the United States.71.Disposablepersonal income equals personal income (Points:1)minus personal tax government transfer payments.minus personal tax payments plus government transfer payments.minus government transfer payments plus personal tax payments.72.Ifnet taxes fall by $80 billion, we would expect (Points:1)the government deficit to fall by $80 billion.household savings to rise by $80 billion.household savings to rise by less than $80 billion.household savings to fall by more than $80 billion.73.Scenario 21-1Consider the following data for a closed economy:Refer to Scenario 21-1. Based on the information above, what is the level of privatesaving in the economy? (Points : 1)$3 trillion$4 trillion$5 trillion$8 trillion74.Whichof the following explains the causes of the changes in the unemployment rateat the end of a recession?(Points:1)Firms are hesitant to rehire laid off workers as they continue to operate below capacity.Firms rapidly hire new workers at the first sign of on an increase in demand for theirgoods.Discouraged workers return to the labor force and this makes the unemployment ratefall.Discouraged workers leave the labor force and this makes the unemployment rate rise.75.Ifthe economy enters into a recession, the equilibrium quantity of loanable fundsshould ________ and the real interest rate should ________. (Points:1)fall; risefall; fallrise; fallrise; rise76.Since1990, real GDP per capita has ________ and this measure ________ theactual growth in standards of living in the U.S. over this time. (Points:1)increased; understatesincreased; overstatesdecreased; understatesdecreased; overstates77.Purchasesof which of the following goods would be dramatically reduced during arecession?(Points:1)tomatoesink pensgasolinerefrigerators78.Supposethat homemakers are included as employed in the labor force statistics,rather than being counted as out of the labor force. This would (Points:1)increase the measured unemployment rate.increase the measured labor force participation rate.decrease the number of persons in the labor force.decrease the number of persons in the working-age population.79.Whichof the following would decrease the unemployment rate? (Points:1)an increase in the minimum wagean increase in the efficiency wagean increase in labor union membershipgovernment aid to retrain unemployed workers80.Thelabor force equals the number of people(Points:1)employed.unemployed.employed plus the working-age population.81.Globalizationrefers to(Points:1)the process of establishing a common world currency.the willingness of individuals within a given country to share knowledge with oneanother.the process of countries becoming more open to foreign trade and investment.the reduction in growth rates of real GDP per capita as a result of trade with foreigncountries.82.Theindustrialized group of countries has growth rates that are consistent with thefindings of the economic growth model. That is, Ireland and Japan had ________incomes in 1960 than the U.S. and Switzerland, and Ireland and Japan grew ________than the U.S. and Switzerland between 1960 and 2004. (Points:1)lower; more rapidlygreater; less rapidlylower; less rapidlygreater; more rapidly83.Productivitygains in the United States since 1995 have been ________ productivitygains in other leading industrial nations.(Points:1)the same aslower thanhigher thanmore variable than84.Significanteconomic growth did not begin in the world until (Points:1)1000 A.D.1750 A.D.1820 A.D.the 20th century A.D.85.Consumptionspending will ________ when disposable income ________. (Points:1)increase; increasesincrease; decreasesdecrease; increaseschange unpredictably; decreases86.Macroeconomicequilibrium occurs when (Points:1)aggregate expenditure = GDP.aggregate expenditure = C+ I + G + net transfers.aggregate income = planned inventories.aggregate income = planned inventories.87.Anexample of assets that are included in household wealth would be (Points:1)stocks, bonds, and savings accounts.stocks, loans owed, and savings accounts.stocks, bonds, and mortgages.stocks, credit cards, and savings accounts.88.Ifthe consumption function is defined as C =

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