An investment tax credit ________. A) is designed to incentivize higher capital stock expenditures at any given interest rate B) may lead to increases in autonomous investment C) may put upward pressure on the interest rate D) all of the above E) none of the above ANSWER D
Date: September 10th, 2020
Human capital is knowledge in A) books. B) people. C) firms. D) government. ANSWER B
Date: September 10th, 2020
A decision to increase the parameter λ in the MP curve is an example of ________. A) autonomous easing B) leftward movement along the curve C) rightward movement along the curve D) endogenous response E) autonomous tightening ANSWER E
Date: September 10th, 2020
The standard IS curve is adjusted in new Keynesian theory to account for ________. A) the forward-looking behavior of households and firms B) the difference between real and nominal variables C) changes in GDP, or Gross Domestic Product D) the impact of a rising national debt ANSWER A
Date: September 10th, 2020
Paul Romer argues that a key feature of knowledge is A) divisibility. B) private ownership. C) nonrivalry. D) durability. ANSWER C
Date: September 10th, 2020
In the new Keynesian model, sticky prices may be due to ________. A) involuntary unemployment B) negative productivity shocks C) positive productivity shocks D) staggered prices ANSWER D
Date: September 10th, 2020
Consider the two graphs above. Suppose that the domestic currency is expected to strengthen. This would ________ the desired level of the capital stock, as depicted in graph ________. A) increase; B B) increase; A C) decrease; B D) decrease; A ANSWER D
Date: September 10th, 2020
“Crowding out” refers to the decrease in ________ that may result from an increase in government spending. A) private investment B) imports C) private saving D) all of the above E) none of the above ANSWER A
Date: September 10th, 2020
A shift of the MP curve ________. A) implies an automatic adjustment of the interest rate B) implies a direct policy action of the Federal Reserve C) does not alter the relationship between inflation and the interest rate D) all of the above E) none of the above ANSWER B
Date: September 10th, 2020
In the endogenous growth model, human capital accumulation is best described as a form of A) consumption. B) investment. C) government spending. D) none of the above ANSWER B
Date: September 10th, 2020
