According to Solow’s exogenous growth theory, what happens to a country at steady state that suffered extensive capital destruction due to a war or climate event? A) It will stay poor forever. B) It will grow back to be richer than before. C) It will get back to its original status. D) Anything can happen. […]
Date: September 10th, 2020
Increases in ________ typically lead to decreases in consumption A) the interest rate B) disposable income C) autonomous consumption D) all of the above E) none of the above ANSWER A
Date: September 10th, 2020
The endogenous variable in the monetary policy curve is ________. A) the policy parameter, λ B) the real interest rate C) the autonomous component, D) the federal funds rate E) the inflation rate ANSWER B
Date: September 10th, 2020
The fraction of capital that wears out every year is known as ________. A) gross investment B) depreciation C) net investment D) devaluation ANSWER B
Date: September 10th, 2020
Critics of real business cycle analysis suggest that the persuasiveness of the model may be limited by the existence of ________. A) flexible wages and prices B) rising wages C) voluntary unemployment D) labor hoarding ANSWER D
Date: September 10th, 2020
An example of a stock would be A) real GDP. B) savings. C) investment. D) the amount of money in circulation. ANSWER D
Date: September 10th, 2020
The incentive to collect information is undermined by the ________. A) opportunity cost of collecting information B) asymmetric character of information flows C) free rider problem D) Willamette effect ANSWER C
Date: September 10th, 2020
The MP curve indicates the relationship between ________ and the ________. A) taxes; price level B) the real interest rate; inflation rate C) monetary policy; IS curve D) all of the above E) none of the above ANSWER B
Date: September 10th, 2020
In the Solow growth model, countries with identical total factor productivities, identical labor force growth rates, and identical savings rates A) always have identical levels of capital per worker and output per worker. B) in equilibrium, have identical levels of capital per worker and output per worker. C) in equilibrium, have identical levels of capital […]
Date: September 10th, 2020
Total factor productivity shocks are not a good explanation of economic fluctuations in the New Keynesian model for all the following reasons except A) they do not generate output fluctuations. B) employment drops when TFP increases. C) the real wage drops when TFP increases. D) they do not generate price fluctuations. ANSWER C
Date: September 10th, 2020
