Assuming that there is an excess supply of money in the classical model, then a. a matching excess demand for commodities will lower the aggregate price level. b. a corresponding excess demand for commodities will drive the aggregate price level up. c. an equal excess demand for commodities will not affect the price level. d. […]
In the new classical model, the aggregate supply schedule depends on a. the expected level of the money stock. b. the expected price level. c. the expected values of fiscal policy variables and other possible determinants of aggregate demand. d. Both a and c e. All of the above ANSWER B
Strong growth in the U.S. during the 1990s may have been the result of a. higher rates of government savings. b. reduced international trade barriers. c. strong labor productivity growth. d. stable inflation. e. All of the above ANSWER E
With regard to the question “What were the lives of those who died in the Civil War (1861–1865) worth?” Hughes and Cain (2011) conclude that (a) there is no way to answer this question because people have infinite worth. (b) an estimate can be made by calculating the value of the loss of “human capital.” […]
The average number of weekly hours worked in manufacturing began to decline during World War I (1914–18). Indicate whether the statement is true or false ANSWER TRUE
Taxes impact incentives to use resources since they distort relative prices. Indicate whether the statement is true or false ANSWER TRUE
According to the theory of money, what is the most compelling evidence to use against those researchers or historians who believe that England was responsible for creating a shortage of money in colonial America? (a) Colonial growth in commerce and trade proceeded. (b) The colonists paid moderate rates of interest. (c) Investment in colonial America […]
The supply-siders argue that investment is a. primarily a function of current income. b. highly responsive to changes in after-tax real interest rates. c. primarily a function of expectations. d. both a and b. ANSWER B
The amount earned by the tertiary laborer is determined by labor productivity in the primary and secondary sectors of the U.S. economy. Indicate whether the statement is true or false ANSWER TRUE
Stagflation can be explained by a. the IS curve shifting up. b. the IS curve shifting down. c. the LM curve shifting to the right. d. the LM curve shifting to the left. e. none of the above. ANSWER E
