For a borrower in a (c,c’) graph, the optimal consumption bundle is A) to the left of the endowment point. B) to the right of the endowment point. C) on the endowment point. D) dependent on other factors. ANSWER B
Date: September 10th, 2020
Prior to World War II, in the United States, financial crises occurred every ________ years or so. A) twenty B) seven C) fifty D) three ANSWER A
Date: September 10th, 2020
For the period 1947-2012, employment in the United States was A) procyclical and leading. B) procyclical and lagging. C) countercyclical and leading. D) countercyclical and lagging. ANSWER B
Date: September 10th, 2020
As income rises ________. A) the number of transactions households and firms undertake should increase B) wealth also rises C) demand for real money balances should increase D) all of the above E) none of the above ANSWER D
Date: September 10th, 2020
In the monetary small open-economy model with a fixed exchange rate, the domestic A) government loses control over the level of domestic government spending. B) government loses control over the level of domestic taxes. C) government loses control over the level of domestic government spending and domestic taxes. D) central bank loses control over the […]
Date: September 10th, 2020
One of the primary objections to the new classical model is that ________. A) firms could easily get information about price movements and so would not be fooled for very long B) price is negatively related to quantity demanded, but positively related to quantity supplied C) business cycles are relatively brief in duration D) it […]
Date: September 10th, 2020
According to agency theory, a financial crisis results from ________ that disrupts the flow of funds from lender-savers to borrower-spenders. A) an increase in asymmetric information B) a macroeconomic shock C) the existence of asymmetric information D) a decrease in saving ANSWER A
Date: September 10th, 2020
For the period 1947-2012 in the United States, the price level was A) acyclical. B) bicyclical. C) procyclical. D) countercyclical. ANSWER D
Date: September 10th, 2020
In the monetary small open-economy model with a fixed exchange rate, an increase in the foreign price level has which impact on domestic money demand? A) It increases it. B) It decreases it. C) It has no impact. D) It depends. ANSWER A
Date: September 10th, 2020
Why is residential investment procyclical? What will be an ideal response? ANSWER Cyclical fluctuations of income and expected income dominate the demand for housing. The user cost of housing is composed of procyclical elements — the real interest rate and the relative price of housing — which would counter the cyclicality of residential investment. […]
Date: September 10th, 2020
