Which of the following hypotheses about voter behavior have been advanced in public-choice literature? a. Voters are myopic b. Unemployment is more likely to result in vote loss than is higher inflation c. Deficit bias of the budget process d. Both a and c e. All of the above ANSWER E
Date: September 10th, 2020
Consistent with the mercantilist theory, the colonies had (a) a trade deficit with England. (b) a trade surplus with England. (c) a balance of trade with England. (d) about an equal number of annual trade deficits and surpluses over the years. ANSWER (a)
Date: September 10th, 2020
The label ‘Asian Tigers’ describes the following economies ________. A) China, South Korea, Singapore and Taiwan B) Hong Kong, Taiwan, South Korea and Singapore C) Singapore, Taiwan, Hong Kong, and China D) South Korea, Singapore, China and Hong Kong ANSWER B
Date: September 10th, 2020
Menu costs suggest that sticky prices are ____ for firms but _____ for the economy as a whole. a. optimal; suboptimal b. bad; good c. natural; unnatural d. suboptimal; optimal. e. suboptimal; suboptimal ANSWER A
Date: September 10th, 2020
Eisenhower’s conservative policies were characterized by budget surpluses that produced further declines in price levels. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
What does Ricardian equivalence imply about the relative size of the expenditure and tax multipliers? What will be an ideal response? ANSWER If Ricardian equivalence holds, the tax multiplier is zero. The expenditure multiplier is zero, as well, since the decrease in government saving is matched by an increase in private saving. If, however, […]
Date: September 10th, 2020
If the propensity to hold money is 6 and the money supply is 12, then the classical aggregate demand curve is a. P = 2Y b. P/Y = 48 c. P = 1/(2Y) d. P = 2/Y ANSWER D
Date: September 10th, 2020
The Cambridge and Fischer versions of the quantity theory are identical if a. V = k.. b. V=k2. c. V= 1/k. d. none of the above. ANSWER C
Date: September 10th, 2020
During World War II, the distribution of income shifted. Who did this shift favor? (a) Labor (b) The idle and wealthy class (c) The government (d) Foreign-born individuals ANSWER (a)
Date: September 10th, 2020
The structural deficit is the deficit that a. is composed by of nondiscretionary spending by the federal government. b. results from the economy being below its natural rate of output. c. exists when output is at its natural rate of output. d. results from temporary tax cuts. e. all of the above ANSWER C
Date: September 10th, 2020
