From the perspective of households and businesses deciding where to deposit their money, the key advantage of the private loans issued by commercial banks is ________. A) transparency B) marketability C) incentive for the bank to collect information D) relatively high interest rates ANSWER C
Date: September 10th, 2020
Shocks to long-run aggregate supply can be a source of business fluctuations ________. A) only in real business cycle models B) only in new Keynesian models C) in both real business cycle and new Keynesian models D) only if the money supply rises ANSWER C
Date: September 10th, 2020
Ricardian equivalence suggests that government budget deficits generated by decreases in current taxes A) increase the current account surplus. B) decrease the current account surplus. C) have no effect on the current account surplus. D) have unpredictable effects on the current account surplus. ANSWER C
Date: September 10th, 2020
What is a characteristic of human capital? A) rivalry B) rapid accumulation C) private ownership D) concavity ANSWER C
Date: September 10th, 2020
In the labor force, we include. A) hospitalized people. B) unemployed people. C) students, D) people on social security. ANSWER B
Date: September 10th, 2020
Throughout 2008, inflation and the real interest rate declined together. The cause is a combination of ________. A) monetary policy easing and declining autonomous spending B) declining autonomous spending and movement along a fixed MP curve C) monetary policy tightening and inversion of the MP curve D) increased government spending and movement along a fixed […]
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
In the model of the open economy with perfect capital mobility, ________ is an exogenous variable. A) Y B) C C) I D) S E) r ANSWER A
Date: September 10th, 2020
Before the financial crisis of 2007, inflation was on the rise. According to the MP curve, this would lead to ________. A) an increase in the real interest rate B) an upward shift of the MP curve, if policymakers opted for autonomous tightening C) a decrease in aggregate output D) all of the above E) […]
Date: September 10th, 2020
In the new Keynesian model, a positive, permanent supply shock will result in ________. A) an increase in aggregate demand B) a decrease in aggregate demand C) no change in aggregate demand D) a change in aggregate demand, only if the shock is anticipated ANSWER A
Date: September 10th, 2020
