Which of the following was the most successful attempt to establish a colony with the longest and most sustainable future, according to Hughes and Cain (2011)? (a) Jamestown (b) Plymouth Company (c) Massachusetts Bay (d) Maryland ANSWER (c)
Date: September 10th, 2020
New Keynesian economics differs from real business cycle economics in that a. markets are perfectly competitive in new Keynesian models. b. business cycles are fluctuations in the natural rate of unemployment in new Keynesian models. c. wages and prices are perfectly flexible. d. agents maximize utility in the new Keynesian model. e. none of the […]
Date: September 10th, 2020
What is the relationship between real and nominal GDP? a. real GDP = nominal GDP – Price level b. nominal GDP = Real GDP/Price level c. real GDP = nominal GDP/Price level d. real GDP = nominal GDP + Price level. ANSWER C
Date: September 10th, 2020
Consider the impact of an increase in labor-enhancing technology within the classical model. Provide graphs to illustrate what happens to real wages, labor, output, and the price level. What will be an ideal response? ANSWER An increase in labor-enhancing technology will shift the production function upwards, which will increase labor demand and increase the […]
Date: September 10th, 2020
On the diagram above, show the new steady-state capital-labor ratio that results from a decrease in the saving rate. Can you say what has happened to the equilibrium level of consumption per worker? What will be an ideal response? ANSWER As saving/investment falls, the equilibrium capital-labor ratio declines along the depreciation line. As the […]
Date: September 10th, 2020
An increase in the money stock has no effect on equilibrium income whenever the a. IS curve is horizontal. b. IS curve is vertical. c. LM curve is vertical. d. LM curve is horizontal. ANSWER B
Date: September 10th, 2020
Policy is conducted via a rule if policymakers a. use monetary and fiscal policy only when the political situation dictates it. b. set monetary and fiscal policy according to multiple but predetermined goals. c. a free to respond to unexpected changes in economic conditions. d. announce in advance how they will respond to changes in […]
Date: September 10th, 2020
The idea of interchangeable parts, which was an important aspect of the American System of Manufacturing, is attributed by Hughes and Cain (2011) to (a) Henry Ford, who used it in the production of automobiles. (b) Adam Smith, who suggested it in his book The Wealth of Nations. (c) Thomas Jefferson, who used it in […]
Date: September 10th, 2020
In a steady-state economy with no population growth, capital per worker is 86, the saving rate is 25 percent, and the depreciation rate is 11 percent. The level of output per worker is ________. A) 195 B) 38 C) 35 D) 47 ANSWER B
Date: September 10th, 2020
According to the IS curve, the tax multiplier is always ________. A) larger in absolute value than the expenditure multiplier B) equal to the expenditure multiplier C) smaller in absolute value than the expenditure multiplier D) equal to one ANSWER C
Date: September 10th, 2020
