In the Mundell-Fleming model, the exogenous variables are a. government spending, taxes, and income. b. the exchange rate and the price level. c. the price level, the world interest rate, monetary policy, and fiscal policy. d. the world interest rate, the price level, and the exchange rate. e. none of the above. ANSWER C
The government significantly raised farm incomes by raising farm prices by: (i) destroying crops, (ii) slaughtering millions of baby pigs and pregnant sows, (iii) paying farmers not to grow crops and (iv) injecting dye into harvested potatoes, making them inedible. Indicate whether the statement is true or false ANSWER FALSE
According to the Keynesian model, a decline in the expected price level a. will increase the inflation rate a central bank must generate to achieve a target level of unemployment. b. will decrease the inflation rate a central bank must generate to achieve a target level of unemployment. c. will not affect the inflation rate […]
Hughes and Cain (2011) give some credit to which of the following factors for the 1860–1910 increase in the number of people employed, shorter work days and higher real incomes? (a) A decrease in the number of immigrants (b) A closed economy with no imports coming into or exports going out of the U.S. (c) […]
Brinley Thomas (1954) argues that immigrants were attracted to the United States between 1815 and 1914 for all of the following reasons except (a) Harvest failures in the home countries of the immigrants (b) Organized labor opportunities, health benefits, safe working conditions and healthy work environments in the U.S. (c) European population increases, contributing to […]
Assuming imperfect capital mobility and a fixed exchange rate, then an expansionary monetary policy a. results in a balance of payments surplus without a conflict between domestic goals and external balance. b. results in a balance of payments deficit with a potential conflict between domestic goals and external balance. c. will shift the LM curve […]
Franklin D. Roosevelt’s nationwide “Bank Holiday” in March 1933 merely finished the job started by the governors of the states, who were already closing down the banking systems. Indicate whether the statement is true or false ANSWER TRUE
Inflation leads to bracket creep, which forces taxpayers to pay a larger percentage of their income in taxes, when (a) Changes in the real purchasing power of their income do not keep pace with inflation. (b) Changes in the real purchasing power of their income keep pace with inflation. (c) Income tax codes change quickly […]
On the farm, which of the following people had the highest labor value? (a) A woman (b) A man (c) A child (d) A grandparent ANSWER (b)
Which of the following is correct? The natural rate of unemployment a. is a zero unemployment rate. b. has been steady at 3 percent over the past decade. c. is defined by Friedman as that rate of unemployment “in which everyone who wants a job can have a job.” d. is the unemployment rate that […]
