When drawn against the current real wage, the labor demand curve is A) upward sloping because the marginal product of labor rises with the quantity of labor employed. B) upward sloping because the marginal product of labor declines with the quantity of labor employed. C) downward sloping because the marginal product of labor rises with […]
The original work on the application of the time inconsistency problem in macroeconomics is due to A) Milton Friedman and Robert Lucas. B) Michael Hutchinson and Carl Walsh. C) Finn Kydland and Edward Prescott. D) Robert Barro and Donald Gordon. ANSWER C
The marginal product of a factor of production A) is equal to the ratio of the amount of that factor of production to the amount of output produced. B) is equal to the amount of additional output that can be produced with one additional unit of each factor input. C) is equal to the amount […]
When drawn against the current real wage, the labor demand curve shift to the right if A) the interest rate increases. B) current taxes increase. C) total factor productivity increases. D) future capital increases. ANSWER C
Federal government outlays include ________. A) transfer payments, grants to states, interest payments on the national debt and income tax revenues B) grants to states, interest payments on the national debt, income tax revenues and government purchases C) interest payments on the national debt, income tax revenues, government purchases and transfer payments D) government purchases, […]
Chain-weighted GDP deflator inflation differs from GDP deflation inflation because: a. it uses different goods in its calculation. b. it uses two different base years to get the quantities used to calculate the index. c. it uses a constant set of prices every year. d. it uses two different base years to get the prices […]
An increase in taxes a. reduces income by more than the total fall in consumption. b. reduces income by the same amount as the total fall in consumption. c. reduces income and consumption by the same amount as taxes fall. d. reduces income by the amount of the initial fall in consumption. ANSWER B
Inflation might lead to ________ because ________. A) lower demand for stocks; of tax distortions B) lower demand for cash; money does not typically yield interest C) uncertain or uneven demand for goods; higher fluctuations in relative prices make it harder for consumers to compare among goods and make rational consumption decisions D) all of […]
Which of the following are not included in the consumption component of gross domestic product? a. Purchases of stocks and bonds. b. Consumer durable goods c. Nondurable consumption goods d. Consumer services ANSWER A
Next period’s capital is equal to current-period investment A) plus the amount of current capital left over after depreciation. B) minus the amount of current capital left over after depreciation. C) plus the amount of current period depreciation. D) minus the amount of current period depreciation. ANSWER A
