According to the monetarist view, the a. IS schedule is quite flat; hence, reflecting a high interest elasticity of aggregate demand. b. IS schedule is quite steep; hence, reflecting a high interest elasticity of aggregate demand. c. LM schedule is quite flat; hence, reflecting a high interest elasticity of money demand. d. IS schedule is […]
Over the long-run, fluctuations in the growth rate in output are primarily driven by fluctuations in a. investment in capital. b. educational attainment. c. fluctuations in the labor force. d. fluctuations in labor productivity. ANSWER C
In a system of flexible exchange rates, lower inflation abroad would induce a. a rise in the U.S. exchange rate. b. a fall in the U.S. rate of exchange. c. a balance of payments deficit for the United States. d. no change in U.S. exchange rates. ANSWER B
The rapid adoption of Basic Oxygen Furnaces by “Big Steel” (the top six firms) kept the American basic steel industry from falling behind changes in world technology during the 1960s. Indicate whether the statement is true or false ANSWER FALSE
Fogel’s work (1964) on the economic impact of railroads is mostly written in response to (a) Rostow’s takeoff theory. (b) Schumpeter’s theory of railroads building ahead of demand. (c) David’s theory of path dependency. (d) Engerman’s theory of multiroute analysis. ANSWER (a)
One reason the colonials complained about the Navigation Acts was (a) the “shortage” of money; they believed the trade deficits of the colonies were bleeding them of coins. (b) the “surplus” of money that was causing inflation; they believed the trade deficits were flooding the colonies with coins. (c) the Acts’ not allowing foreign coins, […]
Monetarists emphasize a. crowding-out but not the liquidity trap. b. crowding-out and the liquidity trap. c. the liquidity trap but not crowding-out. d. neither crowding-out nor the liquidity trap. ANSWER A
Economic prosperity returned under the New Deal programs of the 1930s. Indicate whether the statement is true or false ANSWER FALSE
The decline of output of other domestic auto producers besides Ford, General Motors and Chrysler occurred in the presence, even before 1970, of rising sales of imported cars in the U.S. market. Indicate whether the statement is true or false ANSWER TRUE
The higher the exchange rate, the a. the lower the dollar cost of imported goods and the higher the demand for foreign exchange. b. higher the dollar cost of imported goods and the lower the demand for foreign exchange. c. higher both the dollar cost of imported goods and the demand for foreign exchange. d. […]
