Keynes believed that a. perceived that declines in real wages caused by price-level increases would be resisted by labor, whereas an equivalent fall in the real wage from a money wage cut would be accepted. b. perceived that declines in real wages caused by price-level increases would be more readily accepted by labor than an […]
Regarding the regional distribution of population, (a) New England as a whole continued to increase in its population base faster than the Middle Colonies throughout the colonial period. (b) Virginia had the smallest population of any colony at the time of the Revolution. (c) at the end of the colonial period, nearly half the total […]
The Keynesian revolution a. was an attack on the classical supply-determined, full-employment theory of output and employment. b. attacked the quantity theory of money. c. shared with the classical model the belief that prices and wages are perfectly flexible. d. All of the above e. both a and b. ANSWER E
Keynesians have been critical of supply-side economics because it ignores a. the natural rate of unemployment b. exogenous supply-shocks c. distributional issues. d. the costs of high inflation. ANSWER C
During the 1915–1919 fiscal years, income tax revenues comprised approximately 53% of total federal revenues. Today, over 80% of total tax revenues are raised through income taxes. Indicate whether the statement is true or false ANSWER False (Income taxes account for less than 50 percent in total tax revenue today. Other contemporary revenue streams […]
According to the supply-side economists, a cut in the marginal income tax rate would cause a. labor supply to rise, output to rise, and the price level to fall. b. labor supply to rise, the price level to rise, and output to fall. c. labor supply to fall, the price level to rise, with output […]
Unions add costs to labor. Who ultimately absorbs the costs? (a) The employer (b) The union worker (c) The unorganized laborer (d) The consumer ANSWER (d)
Following the war-time prosperity for capital and the rich during World War I (1914–18), income distribution trended towards greater equality when peace came and market forces replaced the economy’s wartime concerns in determining income distribution. Indicate whether the statement is true or false ANSWER TRUE
Which of the following assumptions is crucial to the classical model but not the Keynesian model? a. The real wage always equals the marginal product of labor. b. Real wages are perfectly flexible. c. nominal wages are perfectly flexible. d. monetary policy primarily affects aggregate demand. e. both b and c. ANSWER C
Greenbacks were first issued (a) by the Federal government to help the economy out of a recession in the 1850s. (b) by the States to pay for the construction of canals. (c) by the Federal government to help pay for the Civil War (1861–1865). (d) by banks during the Free Banking Era. ANSWER (c)
