If government spending does not change, an increase in the government deficit leads to A) an increase in current consumption. B) a decrease in current consumption. C) no change in current consumption. D) it depends on the marginal propensity to consume. ANSWER C
Date: September 10th, 2020
A utility function A) needs to measure the absolute level of happiness. B) needs to measure relative amounts of happiness for a single individual. C) helps compare the relative happiness of two separate consumers. D) is most useful if it can be influenced by others. ANSWER B
Date: September 10th, 2020
In the Great Depression, investment spending fell by ________. A) nine-tenths of one percent B) nine percent C) ninety percent D) nine hundred percent ANSWER C
Date: September 10th, 2020
Circulating private bank notes A) have never been used in the United States. B) were widely used in the Free Banking Era. C) were widely used in the United States during the Great Depression. D) are still currently in use in Canada. ANSWER B
Date: September 10th, 2020
Ricardian equivalence implies A) that when the government borrows more, the market real interest rate goes up. B) that if the government saves less, then the nation saves less. C) that when taxes are cut people consume more. D) that consumers will save their tax cuts to pay their future taxes. ANSWER D
Date: September 10th, 2020
In the 1960s, advocates of the Phillips curve suggested ________. A) an “optimal” goal of 1% unemployment and 1% to 2% inflation rates could be achieved B) a “realistic” goal of 7% unemployment and 6% to 7% inflation rates could be achieved C) a “nonperfectionist” goal of 3% unemployment and 4% to 5% inflation rates […]
Date: September 10th, 2020
Both the Federal Reserve System in the United States and the European Central Bank are comprised of geographically dispersed Banks. How might such decentralization contribute to successful monetary policy? What will be an ideal response? ANSWER The economies of both the U.S. and Europe encompass many regions with distinct economic specializations, income levels, demographics, […]
Date: September 10th, 2020
The Fed’s narrowest measure of money is ________. A) M1 B) M2 C) M3 D) all of the above E) none of the above ANSWER A
Date: September 10th, 2020
We use indifference curves because A) households on average do not care. B) they help represent preferences. C) households sometimes make mistakes. D) they formalize the production process. ANSWER B
Date: September 10th, 2020
In U.S. history, use of a commodity-backed paper currency is associated with the A) Free Banking Era. B) Confederacy during the Civil War. C) gold standard. D) Bretton Woods Agreement. ANSWER C
Date: September 10th, 2020
