The income elasticity for cars is high. This is best illustrated by which of the following? (a) College students buy a high percentage of the lower priced, dependable foreign cars. (b) The purchase of all hybrid cars increases in response to the call to reduce the auto’s footprint. (c) U.S. cars built by foreign automakers […]
In the neoclassical growth model, if two countries are exactly the same but one has a lower population growth, we would expect that country to have a. higher output, a higher capital-to-labor ratio, and higher per capita output growth in the steady state. b. the same output and capital-to-labor ratio, but higher per capita output […]
In the last three decades of the 19th century, the long-run supply track of farm prices (a) indicates a decline in farm prices due to a slowly increasing demand and a more rapidly increasing supply. (b) indicates a decline in farm prices due to a slowly increasing supply and a more rapidly increasing demand. (c) […]
An open-economy model is one that a. allows for trade among nations. b. permits free flow of individuals among nations. c. encourages imports but not exports. d. advocates more exports than imports. e. Both a and b ANSWER A
Darby (1984) argues that the problem with declining productivity of the 1970s was not an issue. He adjusted labor productivity upward to take into account which of the following? (a) The immigration policies of the 1970s restricted the free migration of highly qualified workers. (b) More men than women re-entered the workforce. (c) The overall […]
Convergence refers to the movement of countries toward a. the same levels of per capita output growth. b. the same levels of per capita output. c. a constant rate of output growth. d. the same capital-to-labor ratios. e. both b and d. ANSWER E
The Smoot-Hawley Tariff Act of 1930 is thought to have contributed to the severity of the 1930s depression because of the rise in tariff rates and the consequential drop in private consumption, savings and investment. Indicate whether the statement is true or false ANSWER TRUE
In the long run, according to Monetarists a. the natural rates of output and employment depend on factor supplies. b. the natural rates of output and employment depend on technology. c. the influence of the money stock is mainly on the price level and other nominal variables. d. All of the above ANSWER D
The Land Ordinances of 1785 and 1787 established property rights in land that provided for all of the following except (a) Perpetual ownership, if desired (b) Direct inheritance (c) Complete freedom to sell as desired (d) Required inheritance through the principle of primogeniture ANSWER (d)
Monetarist and Keynesian theories of money demand differs in that a. Monetarists assumes that the demand for money is highly inelastic while Keynes assumes money demand is elastic. b. Monetarists assumes that the money demand function is highly stable while Keynes assumes it is unstable. c. Monetarists assumes that there is only a transactions demand […]
