Which of the following statements is correct? With respect to efficiency wage models, a. their key element is an explanation of why the efficiency (or productivity) of workers depends on the real wage. b. the rationale underlying those models implies that firms will set the real wage above the market clearing level. c. they explain […]
Which of the following is correct? A general assumption in real business cycle models is that a. dissimilar individuals populate the economy. b. the labor market does not clear. c. the economy is populated by a group of identical individuals. d. the economy experiences involuntary unemployment. ANSWER C
The struggles and controversies over federal and state powers led to the demise of both the First and Second Bank of the United States. Indicate whether the statement is true or false ANSWER TRUE
What is the relationship between debt intolerance and the inflation tax? What will be an ideal response? ANSWER A government that is unable to borrow (at a reasonable cost) is likely to resort to selling its debt to the central bank, raising the money supply and inflation. As the price level rises, the real […]
If the government wanted to reduce interest rates without changing output, it should a. increase consumption and reduce the money supply. b. increase the money supply and raise government spending. c. increase the money supply and raise taxes. d. both b and c. ANSWER C
Which of the following was a source of the U.S. federal government’s financial revenue for World War II (1941–45)? (a) Tariffs (b) Bond sales to other governments (c) Bond sales to the Federal Reserve System (d) Bond sales to the U.S. Congress ANSWER (c)
Keynesians believe in a. active management of structural deficits an minimal cyclical deficits. b. running structural budget deficits to stimulate output c. running large surpluses during expansions. d. active management of cyclical deficits and minimal structural deficits. e. both c and d. ANSWER E
As cities grew and markets developed, life, fire and death insurance companies emerged to manage risks and help groups of individuals during disasters. Indicate whether the statement is true or false ANSWER TRUE
Productivity growth can be measured ________. A) by dividing output by Kt0.3 Lt0.7 B) by adding the contributions from capital growth and labor growth C) by subtracting the contributions from capital growth and labor growth from the growth of output D) by dividing the growth of output by the contributions from capital growth and labor […]
Which one of the following economic activities was NOT generally undertaken in New England in the colonial period? (a) Fishing (b) Farming (c) Tobacco production (d) Shipbuilding ANSWER (c)
