The degree to which monetary forces are the cause of aggregate demand instability is the major controversy between a. classicists and Keynesians. b. monetarists and new classical economists. c. real business cycle theorists and classicists. d. monetarists and Keynesians. e. None of the above ANSWER D
Date: September 10th, 2020
Relative to the Keynesians, the supply-side economists a. place more emphasis on the importance on the level of investment than on the level of income. b. place more emphasis on the after-tax rate of return as a determinant of investment. c. are more concerned with government budget deficits. d. All of the above ANSWER […]
Date: September 10th, 2020
Which of the following was the single largest component of wealth in colonial America? (a) Land (b) Stocks (c) Bonds (d) Capital ANSWER (a)
Date: September 10th, 2020
The aggregate supply schedule is steeper where the money wage is more variable than where the money wage is fixed because the rise in the money wage in the a. fixed-wage case dampens the effect on employment and output from an increase in the price level. b. variable-wage case dampens the effect on employment and […]
Date: September 10th, 2020
Compared to earlier times, the period of the 1950s to the early 1960s was one characterized by (a) temporary deficit spending of the government. (b) permanent deficit spending of the government. (c) temporary surplus spending of the government. (d) permanent surplus spending of the government. ANSWER (b)
Date: September 10th, 2020
The arguments of Kessel and Alchien (1959) on the terms of trade and the question of “who paid for the Civil War (1861–1865)” conclude that 40 percent of the war’s burden fell on (a) those who exported manufactures. (b) those who purchased imports. (c) farmers alone. (d) the economy as a whole. ANSWER (b)
Date: September 10th, 2020
The classical model differs from the Keynesian model in that a. monetary policy does not impact output in the Keynesian model. b. the classical model focuses on the long-run and the Keynesian model focuses on the short-run. c. fiscal policy is more powerful in the classical model than in the Keynesian model. d. the classical […]
Date: September 10th, 2020
According to the new classical system, a. an anticipated change in aggregate demand will cause labor suppliers to make price forecast errors and will, therefore, affect output and employment. b. anticipated changes in aggregate demand will not affect output and employment because labor suppliers have perfect information about the price level. c. unanticipated changes in […]
Date: September 10th, 2020
An economic rent is created when (a) organized labor pushes its members’ wages above those of unorganized labor. (b) market forces determine prices and output. (c) businesses take market prices as given. (d) laborers accept competitive wages. ANSWER (a)
Date: September 10th, 2020
When all else is held constant, during recessions government (a) revenues and expenditures increase. (b) revenues increase and expenditures decrease. (c) revenues decrease and expenditures rise. (d) revenues and expenditures decrease. ANSWER (c)
Date: September 10th, 2020
