Which of the following is NOT a feature of recent U.S. business cycles? A) The time series of deviations from trend in real GDP is quite choppy. B) The time series of deviations from trend in real GDP is quite smooth. C) There is no regularity to the amplitude of fluctuations in real GDP above […]
Date: September 10th, 2020
In the endogenous growth model presented in the text, A) consumption grows faster than human capital. B) human capital grows faster than consumption. C) both consumption and human capital grow at the same rate. D) neither consumption nor human capital grows in the steady state. ANSWER C
Date: September 10th, 2020
Based on the Saving-Investment Diagram, if the difference between values G and E measures the net capital outflow, then ________. A) the difference between values G and E measures the trade surplus B) the difference between values H and D measures the trade surplus C) the domestic real interest rate is indicated by B D) […]
Date: September 10th, 2020
Deposit insurance can lead to ________. A) an increase in adverse selection B) a decrease in bank costs C) a decrease in bank lending rates D) an increase in risks banks take on ANSWER D
Date: September 10th, 2020
The behavior of investment and real GDP in the United States after the 1990s A) is not consistent with the two-period model with production. B) is consistent with the effects of an increase in the government deficit in the two-period model with production. C) is consistent with the effects of an increase in optimism about […]
Date: September 10th, 2020
Research supporting the new Keynesian model finds that prices are ________. A) slow to adjust to aggregate demand shocks B) changed very frequently C) changed only infrequently D) not as flexible as wages ANSWER A
Date: September 10th, 2020
Predicting business cycles is difficult because A) they are very persistent. B) the weather changes unpredictably. C) statistics lie. D) their frequency is irregular. ANSWER D
Date: September 10th, 2020
Based on the Saving-Investment Diagram, if the world real interest rate is indicated by A, then ________. A) the difference between values G and E measures the trade surplus B) the difference between values G and F measures the trade surplus C) the domestic real interest rate is indicated by B D) desired saving has […]
Date: September 10th, 2020
In the long run, does it matter whether a policy action was anticipated or not? What will be an ideal response? ANSWER In the long run, output is potential output. The response to an anticipated policy action comes sooner, but is ultimately no different than the delayed response to a “recognized” policy. Nonetheless, it […]
Date: September 10th, 2020
Government-backed deposit insurance increases the ________. A) Willamette torsion effect B) adverse selection problem C) moral hazard problem D) the prudential contagion problem ANSWER C
Date: September 10th, 2020
