What characteristic do human and physical capital share? A) Both are controlled by the government. B) Current costs are incurred for future benefits. C) Their growth depends crucially on the growth of total factor productivity. D) The use of both exhibits rivalry. ANSWER B
Date: September 10th, 2020
When property rights are well defined and inexpensive to enforce, ________. A) collateral is an efficient solution to asymmetric information problems B) little or no collateral is needed to secure a loan C) banks become less dominant among intermediaries D) poor borrowers are at no disadvantage relative to wealthy borrowers ANSWER A
Date: September 10th, 2020
The most volatile component of total investment spending is ________. A) construction spending by firms B) spending by firms on equipment C) residential construction by households D) inventory investment ANSWER D
Date: September 10th, 2020
Referring to the graph above, a movement from point H to point I might represent ________. A) the increase in the inflation rate that occurs when the real interest rate rises B) the automatic response of monetary policy to an increase in the inflation rate C) an autonomous tightening of monetary policy D) any of […]
Date: September 10th, 2020
In the new Keynesian model, if an aggregate demand increase is anticipated, then ________. A) aggregate demand will not change B) short-run aggregate supply will shift up immediately C) short-run aggregate supply will shift down immediately D) there is no immediate effect on the short-run supply curve ANSWER B
Date: September 10th, 2020
Problems with interpreting the unemployment rate as a measure of labor market tightness include A) those not in the labor force. B) dissatisfied workers. C) marginally attached workers. D) biases in the CPI. ANSWER C
Date: September 10th, 2020
In a two-period model with production, an increase in the world real interest rate A) increases domestic output and increases the current account surplus. B) increases domestic output and decreases the current account surplus. C) decreases domestic output and increases the current account surplus. D) decreases domestic output and decreases the current account surplus. […]
Date: September 10th, 2020
Which of the following is best characterized as being nonrivalrous? A) consumption goods B) services C) physical capital D) knowledge ANSWER D
Date: September 10th, 2020
In an economy open to international trade ________. A) saving equals investment in equilibrium B) saving is the difference between net exports and investment C) saving equals investment as long as the economy has no exports D) saving equals investment as long as NX=0 E) none of the above ANSWER D
Date: September 10th, 2020
If taxes are reduced, will most people save more or less than before? Does national saving rise or fall? Explain. What will be an ideal response? ANSWER Lower taxes mean higher disposable income, which should encourage increases in both consumption and saving. Reduced government revenue, given government spending, means a decrease in government saving. […]
Date: September 10th, 2020
