The management of expectations has increased in importance in policymaking in recent decades with the rise of ________. A) traditional Keynesian theory B) institutionalist theory C) torsion theory D) new Keynesian theory ANSWER D
Date: September 10th, 2020
We collapse the consumer’s current-period and future-period budget constraints into a single lifetime budget constraint by A) assuming no default. B) substituting for savings. C) eliminating consumption smoothing. D) assuming the consumer knows the future. ANSWER B
Date: September 10th, 2020
Tobin’s q theory adds to neoclassical theory because it ________. A) illustrates the important relationship between tax rates and the incentive to labor B) emphasizes the role played by asset price fluctuations on investment spending C) highlights the impact of a tax increase on business investment D) underlines the relationship between financial innovation and the […]
Date: September 10th, 2020
Compared to dollarization, a currency board A) has a flexible exchange rate. B) has a separate currency. C) conducts independent monetary policy. D) is the same institution. ANSWER B
Date: September 10th, 2020
Expansionary policy only leads to inflation, but does not raise output in ________. A) traditional Keynesian theory B) new Keynesian theory C) real business cycle theory D) traditional Keynesian, new Keynesian and real business cycle theory ANSWER C
Date: September 10th, 2020
The supply of euros is managed by A) the European Monetary Union. B) the European Monetary System. C) the European Central Bank. D) the European Bank for Reconstruction and Development. ANSWER C
Date: September 10th, 2020
According to Tobin’s q theory, the principal objective of investment is ________. A) to increase eligibility for the investment tax credit B) to expand production C) to increase the market value of the firm D) to lower the replacement cost of installed capital ANSWER C
Date: September 10th, 2020
Shifts of the ________ curves result from autonomous monetary policy. A) MP, IS, & AD B) MP & IS, but not AD C) IS & AD, but not MP D) MP, but not IS nor AD E) none of the above ANSWER E
Date: September 10th, 2020
Evidence suggests that financial deepening is of greatest benefit to ________. A) industries that are highly dependent on external sources of funds B) family-owned enterprises C) established firms, rather than new firms D) child workers ANSWER A
Date: September 10th, 2020
A small open economy would typically enjoy a higher trade balance if, in the domestic economy, ________. A) autonomous consumption expenditures decrease B) taxes go up C) government spending decreases D) all of the above E) none of the above ANSWER D
Date: September 10th, 2020
