Advanced Macroeconomics
Midterm Exam
Course Introduction
Advanced Macroeconomics delves into the complex mechanisms that govern the overall functioning of modern economies. The course explores theoretical frameworks and empirical approaches for analyzing economic growth, business cycles, fiscal and monetary policy, and international macroeconomic linkages. Students engage with dynamic general equilibrium models, study the roles of expectations and market imperfections, and critically evaluate policy interventions in the context of both closed and open economies. Emphasis is placed on current research debates and the application of advanced analytical tools to real-world macroeconomic issues, preparing students for research or policy-oriented roles in economics.
Recommended Textbook
Macroeconomics 7th Edition by Olivier Blanchard
Available Study Resources on Quizplus
25 Chapters
1650 Verified Questions
1650 Flashcards
Source URL: https://quizplus.com/study-set/1332 Page 2
Chapter 1: A Tour of the World
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/26586
Sample Questions
Q1) The most recent financial crisis started in
A)stock market.
B)bond market.
C)foreign exchange market.
D)housing market.
Answer: D
Q2) Explain how the financial crisis turned into a major economic crisis.
Answer: Hit by the decrease in housing prices and the collapse in stock prices,and worried that this might be the beginning of another Great Depression,people sharply cut back consumption.Worried about sales and uncertain about the future,firms sharply cut back investment..Decreases in consumption and investment led to decrease in demand,which in turn,led to decrease in output.
Q3) Which of the following countries had the lowest level of output per capita in 2014?
A)Spain
B)France
C)Italy
D)German
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: A Tour of the Book
Available Study Resources on Quizplus for this Chatper
62 Verified Questions
62 Flashcards
Source URL: https://quizplus.com/quiz/26587
Sample Questions
Q1) Explain why economists care about inflation.
Answer: Inflation will cause relative prices to change.It will also cause changes in the distribution of income.Inflation will lead to other distortions such as tax distortions and uncertainty.
Q2) Which of the following represents real GDP?
A)GDP in constant dollars
B)GDP in terms of goods
C)GDP in base year dollars
D)all of the above
Answer: A
Q3) The prices for which of the following goods are included in both the GDP deflator and the consumer price index?
A)goods bought by households
B)goods bought by firms
C)good bought by governments
D)goods bought by foreign households (i.e., exports)
E) all of the above
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: The Goods Market
Available Study Resources on Quizplus for this Chatper
64 Verified Questions
64 Flashcards
Source URL: https://quizplus.com/quiz/26588
Sample Questions
Q1) In the model discussed in Chapter 3,why do we assume G and T are exogenous?
Answer: It is based on two arguments: First,government do not behave with the same regularity as consumers or firms,so there is no reliable rule we could write for G or T.Second,treating G and T as exogenous help explore the implications of alternative spending and tax decisions.
Q2) Suppose the United States economy is represented by the following equations:
Z = C + I + G C = 500 + .5YD T = 600 I = 300
YD = Y - T G = 2000
a.Given the above variables,calculate the equilibrium level of output.
b.Now,assume that government spending decreases from 2000 to 1900.What is the new equilibrium level of output? How much does income change as a result of this event?
What is the multiplier for this economy?
Answer: a.Y = 5000
b.Y = 4800,multiplier = 2.
Q3) Why would consumer decrease consumption even if their disposable income has not changed?
Answer: If consumers start worrying about the future and decide to save more,they will decrease c0 and hence consumption.This is what happened at the start of the most recent financial crisis.
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Financial Markets
Available Study Resources on Quizplus for this Chatper
73 Verified Questions
73 Flashcards
Source URL: https://quizplus.com/quiz/26589
Sample Questions
Q1) We would expect which of the following to occur when the central bank conducts an open market purchase of bonds?
A)a reduction in the monetary base (H)
B)a reduction in the money multiplier
C)an increase in the money multiplier
D)an increase in the money supply
Q2) The federal funds rate is determined in which of the following markets?
A)the market for U.S. treasury securities
B)the money market
C)the bond market
D)the market for central bank money
E) none of the above
Q3) Suppose a liquidity trap situation exists.Which of the following is most likely to occur if taxes are cut?
A)no change in output and no change in the interest rate
B)an increase in output and an increase in the interest rate
C)an increase in output and little change in the interest rate
D)an increase in output and a reduction in the interest rate
E) none of the above
Q4) What is the money multiplier and what factors determine its size?
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Goods and Financial Marketsthe Is-Lm Model
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/26590
Sample Questions
Q1) Which of the following occurs as the economy moves rightward along a given IS curve?
A)A reduction in the interest rate causes investment spending to decrease.
B)A reduction in the interest rate causes money demand to increase.
C)A reduction in the interest rate causes a reduction in the money supply.
D)An increase in government spending causes a reduction in demand for goods.
E) A reduction in taxes causes a reduction in demand for goods.
Q2) A fiscal contraction will tend to cause which of the following to occur?
A)a reduction in the interest rate and a reduction in investment
B)a reduction in the interest rate and an upward shift in the LM curve
C)a reduction in the interest rate and an ambiguous effect on investment
D)no change in output if the Fed simultaneously pursues contractionary monetary policy
Q3) A reasonable dynamic assumption for the IS-LM model is that
A)the economy is always on both the IS and LM curves.
B)the economy is always on the IS curve, but moves only slowly to the LM curve.
C)the economy is always on the LM curve, but moves only slowly to the IS curve.
D)the money market is quick to adjust, but the bond market adjusts more slowly.
E) adjustment to the new IS-LM equilibrium is instantaneous after an LM shift, but not after an IS shift.
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Financial Markets Ii: the Extended Is-Lm Model
Available Study Resources on Quizplus for this Chatper
85 Verified Questions
85 Flashcards
Source URL: https://quizplus.com/quiz/26591
Sample Questions
Q1) The new term introduced in the extended IS-LM model is A)risk premium.
B)nominal interest rate.
C)taxes.
D)G)
Q2) For this question,assume that expected inflation is zero.In this situation,we know that
A)the nominal and real interest rates are equal.
B)the nominal interest rate will exceed the real interest rate.
C)the real interest rate will exceed the nominal interest rate.
D)the real interest will be zero.
E) the real interest rate is negative.
Q3) With a nominal interest rate of 10%,the present discounted value of $200 to be received in one year is
A)$90.91.
B)$165.29.
C)$181.82.
D)$190.00.
E) $220.00.
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: The Labor Market
Available Study Resources on Quizplus for this Chatper
73 Verified Questions
73 Flashcards
Source URL: https://quizplus.com/quiz/26592
Sample Questions
Q1) In the United States,the average length of time people spend unemployed is
A)approximately one month.
B)between two and three months.
C)between ten and eleven months.
D)greater than twelve months.
Q2) The two labor markets in the "dual labor market" are
A)southern versus northern.
B)western versus eastern.
C)English speaking versus non-English speaking.
D)domestic versus foreign.
E) none of the above
Q3) Based on our understanding of the labor market model presented in Chapter 6,we know that an increase in the markup will cause
A)an increase in the equilibrium real wage.
B)a reduction in the equilibrium real wage.
C)a reduction in the natural rate of unemployment.
D)both B and C
Q4) Explain what effect an increase in the unemployment rate will have on the real wage based on: (1)the WS relation; and (2)the PS relation.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: The Phillips Curve, the Natural Rate of Unemployment, and Inflation
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/26593
Sample Questions
Q1) In the Phillips curve equation,which of the following will cause an increase in the current inflation rate?
A)an increase in the expected inflation rate
B)a reduction in the unemployment rate
C)an increase in the markup, m
D)all of the above
E) none of the above
Q2) Explain how a reduction in the proportion of contracts that are indexed affects the relationship between changes in the unemployment rate and inflation.
Q3) For this question,assume that the Phillips curve equation is represented by the following equation: t - t = (m + z)- ut.Given this information,the natural rate of unemployment will be equal to A)m + z.
B)(m + z - ).
C) (m + z).
D)0.
E) none of the above
Q4) Explain what is meant by the "wage-price" spiral.
Q5) What is the difference between deflation and disinflation?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/26594
Sample Questions
Q1) For this question,assume that the economy is initially operating at the natural level of output.A monetary expansion will cause
A)no change in the real wage in the medium run.
B)an increase in investment in the medium run.
C)a reduction in the interest rate in the medium run.
D)no change in the nominal wage in the medium run.
Q2) An increase in the price of oil will cause which of the following in the medium run?
A)no change in the level of output
B)no change in the price level
C)an increase in the unemployment rate
D)a reduction in the interest rate
E) none of the above
Q3) The Phillips curve shows that when the unemployment rate is higher than the natural rate,
A)inflation is higher than expected.
B)inflation is lower than expected.
C)policy rate is higher than expected.
D)policy rate is lower than expected.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: The Facts of Growth
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/26595
Sample Questions
Q1) For this question,assume that the saving rate increases.We know that this increase in the saving rate will cause which of the following?
A)a temporary increase in the level of output per capita
B)no permanent change in the level of output per capita
C)a temporary increase in the rate of growth of output per capita
D)a permanently higher rate of growth of output per capita
E) none of the above
Q2) Research by Richard Layard indicates that happiness
A)increases as output per capita increases.
B)decreases as output per capita increases.
C)does not change as output per capita changes.
D)appears to depend on people's relative incomes.
Q3) Convergence refers to what phenomenon regarding growth theory?
Q4) Assume that constant returns to scale exists and that N and K both decrease by 3%.Given this information,we know that
A)output (Y)will decrease 6%.
B)Y will decrease by 3%.
C)Y will decrease by less than 3%.
D)the capital-labor ratio (K / N)will decrease.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Saving, capital Accumulation, and Output
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/26596
Sample Questions
Q1) Suppose there is an increase in the saving rate.This increase in the saving rate must cause an increase in consumption per capita in the long run when
A)capital per worker approaches the golden-rule level of capital per worker.
B)the saving is used for education rather than physical capital.
C)the rate of saving exceeds the rate of depreciation.
D)there is no technological progress.
E) technological progress depends on human capital.
Q2) Which of the following is not a flow variable?
A)investment
B)saving
C)the money supply
D)output
E) all of the above
Q3) The capital-labor ratio will tend to increase over time when
A)investment per worker equals saving per worker.
B)investment per worker exceeds saving per worker.
C)investment per worker is less than depreciation per worker.
D)saving per worker equals depreciation per worker.
E) output per worker is less than capital per worker.
Q4) Explain the relationship among output,saving,and investment.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Technological Progress and Growth
Available Study Resources on Quizplus for this Chatper
75 Verified Questions
75 Flashcards
Source URL: https://quizplus.com/quiz/26597
Sample Questions
Q1) In the following production function,Y = f(K,NA),suppose A increases by 20%.This 20% increase in A implies that
A)the same output can be produced with 20% less labor.
B)the effective quantity of labor has increased by 20%.
C)output will increase by less than 20%.
D)all of the above
E) both A and C.
Q2) From 1996 to 2011,the rate of growth of output per worker in China has been approximately equal to A)5%.
B)10%.
C)15%.
D)18%.
E) 23%.
Q3) Graphically illustrate and explain the effects of a reduction in the saving rate on the Solow growth model.In your answer,you must clearly label all curves and the initial and final equilibria.In your answer,explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this decrease in the saving rate.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Technological Progress: the Short, the Medium, and
the Long Run
Available Study Resources on Quizplus for this Chatper
64 Verified Questions
64 Flashcards
Source URL: https://quizplus.com/quiz/26598
Sample Questions
Q1) Assume an economy experiences an increase in productivity that occurs as a result of the more efficient use of existing technologies.Given this information,we would expect which of the following to occur?
A)aggregate demand would not change
B)aggregate demand would shift to the right
C)aggregate demand would shift to the left
D)both the aggregate demand and aggregate supply curves would shift to the left
Q2) "Churning" refers to
A)changes in the real wage over the business cycle.
B)changes in the markup over the business cycle.
C)structural change associated with technological progress.
D)the increase in productivity caused by an increase in output.
E) the increase in output caused by an increase in productivity.
Q3) Suppose an economy is characterized by the equations below:
Price setting: P= (1 + m)(W / A)
Wage setting: W=AP(1 - u)
Solve for the natural rate of unemployment if the markup (m)is equal to 4%.
Q4) Explain how technological change can cause changes in wage inequality.
Q5) Explain some of the causes of increased wage inequality.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Financial Markets and Expectations
Available Study Resources on Quizplus for this Chatper
73 Verified Questions
73 Flashcards
Source URL: https://quizplus.com/quiz/26599
Sample Questions
Q1) Suppose the current one-year interest rate is 3%,and financial markets expect the one-year interest rate next year to be 5%.Given this information,the yield to maturity on a two-year bond will be approximately A)4%.
B)6%.
C)8%.
D)12%.
E) none of the above
Q2) Suppose individuals expect an increase in future taxes.Explain what effect this expected increase in future taxes will have on the yield curve and on stock prices in the current period.
Q3) Suppose that financial market participants now expect a future tax cut and that the yield curve is initially upward sloping.Given this information,we would expect which of the following to occur?
A)The yield curve will become steeper.
B)The yield curve will become flatter.
C)The yield curve will become horizontal.
D)The yield curve will become downward sloping.
Q4) Explain what the term structure of interest rates represents.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Expectations, consumption, and Investment
Available Study Resources on Quizplus for this Chatper
73 Verified Questions
73 Flashcards
Source URL: https://quizplus.com/quiz/26600
Sample Questions
Q1) Explain how a change in expected future output could affect current output.
Q2) Human wealth is a function (i.e.,affected by changes in)of which of the following variables?
A)future expected income
B)future expected taxes
C)current interest rates
D)all of the above
E) none of the above
Q3) Suppose an individual experiences a $20,000 increase in real income and the individual believes this increase in income is permanent.Economic theory suggests that this individual's current consumption will
A)remain unchanged.
B)increase by more than $20,000.
C)increase by at most $20,000.
D)decrease or remain unchanged, depending on the value of the real interest rate.
E) decrease, remain unchanged, or increase, depending on the value of the real interest rate.
Q4) Explain why consumption is less volatile than investment.
Q5) Discuss the various components of wealth.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Expectations, output, and Policy
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/26601
Sample Questions
Q1) When answering this question,assume individuals consider only the short-run effects of changes in future variables when forming expectations of future output and future interest rates.Suppose policy makers announce a reduction in future government spending.Which of the following will occur as a result of this expected reduction in government spending?
A)a reduction in the expected future interest rate and no change in expected future output
B)a reduction in the expected future interest rate and an increase in expected future output
C)a reduction in the expected future interest rate and an ambiguous effect on expected future output
D)none of the above
Q2) Which of the following will cause the LM curve to shift down?
A)a reduction in the expected future interest rate
B)a reduction in current income
C)a reduction in expected future taxes
D)all of the above
E) none of the above
Q3) Explain the determinants of aggregate private spending.
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Openness in Goods and Financial Markets
Available Study Resources on Quizplus for this Chatper
81 Verified Questions
81 Flashcards
Source URL: https://quizplus.com/quiz/26602
Sample Questions
Q1) Suppose the interest parity condition holds.Also assume that the one-year interest rate in the United States is 6% and that the one-year interest rate in Canada is 6%.What does this imply about the current versus future expected exchange rate (for the U.S.and Canadian dollars)? Explain.
Q2) Which of the following events will cause the smallest change in the real exchange rate ( )?
A)a 6% drop in E and a 6% increase in the foreign price level (P*)
B)a 6% increase in the domestic price level (P)and a 6% reduction in P*
C)a 6% drop in E and a 6% reduction in P*
D)a 3% increase in E
E) a 2% increase in E and a 2% increase in P
Q3) When the U.S.has a current account surplus,we know that it is also
A)running a balanced trade account.
B)lending to the rest of the world.
C)borrowing from the rest of the world.
D)suffering from negative investment income.
E) none of the above
Q4) Explain what factors determine the expected return on a foreign bond.
Q5) Explain the difference between gross domestic product and gross national product.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: The Goods Market in an Open Economy
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/26603
Sample Questions
Q1) For this question,assume that the Marshall-Lerner condition does not hold.A reduction in the real exchange rate will tend to cause which of the following to occur?
A)a reduction in NX and a reduction in foreign output (Y*)
B)a reduction in NX and an increase in domestic output (Y)
C)an increase in NX and a reduction in Y
D)an increase in NX and an increase in Y
E) none of the above
Q2) A change in which of the following variables will have no direct effect on the level of domestic demand?
A)domestic income
B)the real exchange rate
C)government spending
D)the interest rate (r)
E) none of the above
Q3) Using the ZZ / Y and NX graphs,illustrate graphically and explain what effect an increase in government spending will have on output,exports,imports,and net exports.Clearly label all curves and clearly label the initial and final equilibria.
Q4) Explain the determinants of exports and imports.
To view all questions and flashcards with answers, click on the resource link above.
Page 20
Chapter 19: Output, the Interest Rate, and the Exchange Rate
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/26604
Sample Questions
Q1) Assume that policy makers are pursuing a fixed exchange rate regime.Now suppose that the foreign interest rate increases.Discuss what policy makers must do to maintain the pegged exchange rate.Also discuss what effect this will have on domestic output and net exports.
Q2) In practice,under the EMS,a member country
A)could never change its interest rate.
B)could change its interest rate only if other countries changed theirs as well.
C)must apply to a special European Commission in order to change its interest rate.
D)had complete freedom in choosing the interest rate it wanted.
E) had complete freedom in choosing its interest rate only if it is a very small country.
Q3) Suppose policy makers are pursuing a policy to fix the exchange rate.In such a system with perfect capital mobility,an open market purchase of domestic bonds by the domestic central bank will eventually result in
A)a permanent increase in the monetary base.
B)a permanent reduction in the monetary base.
C)a change in the composition of the monetary base.
D)a gradual reduction in the domestic interest rate.
To view all questions and flashcards with answers, click on the resource link above.
Page 21
Chapter 20: Exchange Rate Regimes
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/26605
Sample Questions
Q1) Assume that policy makers are pursuing a fixed exchange rate regime.Assume that the economy is initially operating at the natural level (i.e.,Y = Yn).Suppose fiscal policy makers increase taxes.This fiscal contraction will cause which of the following?
A)The real exchange rate will be permanently higher in the medium run.
B)The real exchange rate will be permanently lower in the medium run.
C)The effects of this devaluation on the real exchange rate will be ambiguous in the medium run.
D)The real exchange rate will be unchanged in the medium run.
E) none of the above
Q2) The new European Central Bank is located in which country?
A)England
B)Italy
C)France
D)Spain
E) Germany
Q3) Explain each of the following and why each might be used: hard pegs,currency boards,and dollarizations.
Q4) Explain what factors cause shifts of the aggregate demand curve in the open economy model.
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Should Policy Makers Be Restrained
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/26606
Sample Questions
Q1) Analysis of U.S.budget deficits in the United States between 1990 and 2000 indicates that which of the following is primarily responsible for the reduction in the budget deficit?
A)decrease in spending
B)increase in tax revenues
C)decrease in spending and increase in tax revenues
D)lower interest rates
E) increases in tax rates
Q2) Analysis of U.S.growth rates shows that growth rate of output tends to be highest in which year of a presidential administration?
A)the first
B)the second
C)the third
D)the fourth
Q3) What are the main rules of the Budget Enforcement Act of 1990?
Q4) The hostage taking example was developed by
A)John Nash.
B)Kydland and Prescott.
C)John Harsanyi.
D)Reinhard Selten.
To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: Fiscal Policy: a Summing up
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/26607
Sample Questions
Q1) Hyperinflation typically leads to
A)a reduction in barter.
B)a reduction in real money balances.
C)a preference for domestic over foreign currency.
D)an increase in real tax revenues collected by the government.
E) all of the above
Q2) The United States financed the additional government spending during World War II through
A)an increase in the deficit.
B)an increase in taxes.
C)an increase in imports.
D)increases in both the deficit and taxes.
E) increases in both the deficit and imports.
Q3) In the short run,an increase in government spending that causes an increase in the budget deficit
A)affects the level of output but not its composition.
B)affects both the level and composition of output.
C)affects only the price level.
D)is neutral.
E) none of the above
To view all questions and flashcards with answers, click on the resource link above. Page 24
Chapter 23: Monetary Policy: a Summing up
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/26608
Sample Questions
Q1) The existence of inflation does which of the following?
A)facilitates the downward adjustment of real wages
B)reduces shoe-leather costs
C)reduces tax distortions
D)reduces the costs associated with money illusion
Q2) What are the lessons from the crisis for monetary policy?
Q3) Since the 1980s,"NOW" accounts have been included in
A)M1, but not M2.
B)M2, but not M1.
C)both M1 and M2.
D)the monetary base and M1, but not M2.
E) neither M1 nor M2.
Q4) The existence of inflation does which of the following?
A)reduces tax distortions
B)reduces shoe-leather costs
C)allows for the possibility of negative real interest rates
D)reduces the costs associated with money illusion
Q5) Explain what is meant by shoe-leather costs.
Q6) Suppose an economy experiences an increase in inflation.Explain the possible macroeconomic benefits of this increase in inflation.
Page 25
To view all questions and flashcards with answers, click on the resource link above.
Chapter 24: Epilogue: the Story of Macroeconomics
Available Study Resources on Quizplus for this Chatper
64 Verified Questions
64 Flashcards
Source URL: https://quizplus.com/quiz/26609
Sample Questions
Q1) In the 1960s,the monetarist school of thought held that
A)monetary and fiscal policy could explain most of the output fluctuations in U.S. history.
B)there is a long-run tradeoff between inflation and unemployment.
C)efforts to fine-tune the economy are likely to do more harm than good.
D)all of the above
E) none of the above
Q2) Those economists who attempt to explain why wages and prices do not freely adjust would most likely be
A)real business cycle theorists.
B)new classical economists.
C)new Keynesian economists.
D)new growth theorists.
E) none of the above
Q3) Discuss what is meant by the neoclassical synthesis and explain how it emerged.
Q4) The steeper is the IS curve,
A)the more effective is monetary policy.
B)the less effective is monetary policy.
C)the effectiveness of monetary policy does not change.
D)a given change in the money supply will have a greater effect on output.
To view all questions and flashcards with answers, click on the resource link above. Page 26
Chapter 25: Appendix
Available Study Resources on Quizplus for this Chatper
19 Verified Questions
19 Flashcards
Source URL: https://quizplus.com/quiz/26611
Sample Questions
Q1) Which of the following is not included in investment?
A)the purchase of new equipment by firms
B)nondurable goods
C)the purchase of a new home
D)none of the above
Q2) When we use ordinary least squares to determine the relationship between changes in consumption and changes in both current and lagged income,we find that
A)only current income influences current consumption.
B)current income has no impact on current consumption.
C)consumption is not affected by income in any quarter.
D)current income, last quarter's income, and income two quarter's ago all have the same impact on current consumption.
E) current income has a greater impact on consumption than income lagged one quarter.
Q3) Which of the following is not a component of consumption?
A)nondurable goods
B)purchase of a new condominium
C)education expenses
D)none of the above
To view all questions and flashcards with answers, click on the resource link above.