Countries with different initial levels of per capita income may gravitate to a similar level of per capita income. Economists call this phenomenon ________. A) convergence B) simulation C) gravitation D) depreciation ANSWER A
Date: September 10th, 2020
The smallest component of federal outlays is ________. A) government purchases B) transfer payments C) interest on government debt D) grants to states ANSWER C
Date: September 10th, 2020
Based on the graph above, suppose the economy is at point 2, then output falls to 10 and there is a price shock of one percent. The inflation rate next period will be ________ percent. A) 5 B) 3.5 C) 4.5 D) 4 E) none of the above ANSWER C
Date: September 10th, 2020
Based on the graph above, if the economy is at point 2, then (assuming no price shocks and no changes in actual and potential output) the inflation rate next period will be ________ percent. A) 5 B) 3.5 C) 4.5 D) 4 E) none of the above ANSWER A
Date: September 10th, 2020
The best case for intermediate targeting on monetary aggregates is where the a. LM schedule is flat and the money demand function is stable. b. IS schedule is flat and the level of investment is stable. c. LM schedule is steep and the money demand function is stable. d. IS schedule is steep and the […]
Date: September 10th, 2020
Which of the following equations illustrates the equilibrium level of income with respect to the simple Keynesian closed-economy model? a. Y = [1/(1 − b)](a − bT − I + G) b. Y = [1/(1 − b)](a + bT + I + G) c. Y = [1/(1 + b)](a − bT − I − G) […]
Date: September 10th, 2020
Over the Fed’s history, it has targeted a. bank reserves. b. the Federal funds rate. c. monetary aggregates. d. inflation. e. all but d. ANSWER E
Date: September 10th, 2020
Rational expectations imply a. markets always clear. b. that prices are “sticky” c. policy that is unpredictable is irrelevant to economic outcomes. d. both a and c. e. None of the above. ANSWER E
Date: September 10th, 2020
Government purchases of goods and services a. consist of current output of goods and services purchased by the federal government only. b. includes the current output of goods and services bought by the federal, state, and local governments. c. are the largest component of gross national product. d. include both defense spending and spending on […]
Date: September 10th, 2020
The production function is concave in capital because A) the contribution to production of each additional unit of capital decreases. B) the marginal product of capital is increasing. C) the marginal product of labor is decreasing. D) the cost of loans increases with their quantity. ANSWER A
Date: September 10th, 2020
