Why don’t consumers work in the two-period model? A) It’s a convenient simplification. B) It would make no difference to the model if consumers could work. C) People who participate in real-world credit markets do not work. D) We don’t know how to include workers in the model. ANSWER A
Date: September 10th, 2020
China’s recent economic performance is most similar to the experience of ________. A) the United States in the 1890s B) Japan in the 1960s & 1970s C) Cuba in the 1990s D) the Soviet Union in the 1950s & 1960s ANSWER D
Date: September 10th, 2020
Real consumption tends to be A) procyclical and less variable than real GDP. B) procyclical and more variable than real GDP. C) countercyclical and less variable than real GDP. D) countercyclical and more variable than real GDP. ANSWER A
Date: September 10th, 2020
A key international institution that plays an important role in exchange rate determination is the A) U.S. Currency Board. B) European Central Bank. C) World Bank. D) International Monetary Fund. ANSWER D
Date: September 10th, 2020
Per capita income in China is approximately ________% of the U.S. level. A) 17 B) 80 C) 40 D) 5 ANSWER A
Date: September 10th, 2020
Suppose the U.S. government announces that it will bring the federal budget deficit to zero, over the next ten years, with no change in tax rates. Describe the effects of such a policy according to the three business cycle models, assuming that the policy is fully credible. ANSWER In the traditional Keynesian model, anticipated […]
Date: September 10th, 2020
An example of a leading variable in the US is A) GDP. B) investment is structures. C) the consumer price index. D) housing starts. ANSWER D
Date: September 10th, 2020
In an open economy, an increase in saving might not cause an increase in domestic investment. Why not? Does that mean that an increase in saving is undesirable? What will be an ideal response? ANSWER An increase in saving can affect the domestic real interest rate only by changing the world interest rate. If […]
Date: September 10th, 2020
The Bretton Woods Agreement A) fixed the value of the U.S. dollar relative to gold. B) fixed the value of the U.S. dollar relative to the euro. C) required foreign central banks to hold certain minimum amounts of gold as foreign exchange reserves. D) required member nations, other than the United States, to disband their […]
Date: September 10th, 2020
Suppose the demand curve is Y = 38 – 3π, and the current values for output and the real interest rate are 29 and 7 percent, respectively. A decrease in inflation leads to a new output level of 32 and real interest rate at 6 percent. The monetary policy curve is ________. Fill in the […]
Date: September 10th, 2020
