In the (consumption,leisure) space, indifference curves as we have assumed them are A) downward sloping and bowed out of the origin. B) downward sloping and bowed towards the origin. C) upward sloping and bowed out of the origin. D) upward sloping and bowed towards the origin. ANSWER B
Date: September 10th, 2020
An important reason why Ricardian equivalence may fail is if A) borrowing and lending are done through intermediaries. B) government debt incurred today may not be paid off until after some current consumers are deceased. C) state and local governments also engage in debt finance. D) some consumers are borrowers, while other consumers are lenders. […]
Date: September 10th, 2020
In the one-period model, what do we assume about household preferences? A) Households prefer more to less. B) Households like money. C) Households dislike taxes. D) Households care about others. ANSWER A
Date: September 10th, 2020
Subprime borrowers ________. A) are those individuals who owe more on their mortgage than the value of their home B) possess a relatively low FICO score C) rely on mortgage-backed securities to support their mortgage applications D) are those with an income level below the value of their mortgage ANSWER B
Date: September 10th, 2020
Most transactions between large financial institutions in the United States are handled by A) check. B) Fedwire. C) currency. D) ACH. ANSWER B
Date: September 10th, 2020
What can be concluded from Milton Friedman and Edmund Phelps’ expectations-augmented Phillips curve? A) that there is no long run tradeoff between unemployment and inflation B) that there is a short run tradeoff between unemployment and inflation C) that there are two types of Phillips curves D) all of the above E) none of the […]
Date: September 10th, 2020
The Ricardian Equivalence says A) whatever the level of government expenses, consumption is the same. B) whatever the timing of taxes, consumption is the same. C) higher government expenses reduce consumption. D) an increase in current consumption has to lead to a decrease in future consumption. ANSWER B
Date: September 10th, 2020
Which of the following is not a reason for the Ricardian equivalence theorem to fail to hold? A) tax distortions B) people can borrow from the government. C) finite-lived people. D) credit market imperfections. ANSWER B
Date: September 10th, 2020
The current monetary system in the United States is A) a mix of fiat money and exchange using transactions deposits at banks. B) a commodity money system. C) a gold standard. D) a commodity-backed fiat money system. ANSWER A
Date: September 10th, 2020
Which characteristic does money currently not have? A) It is issued by a government or central bank. B) It is considered valuable. C) It is backed by gold. D) It is a durable good. ANSWER C
Date: September 10th, 2020
