Exam Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Primarily, macroeconomists use microeconomic principles to study A) long-run economic growth and employment policies. B) business cycles and trends in the stock market. C) trends in the stock market and long-term economic growth. D) short-run and long-run economic growth. E) long-run economic growth and business cycles.
1)
Answer: E Diff: 2
Type: MC
2) Sometimes it is useful to separate economic movements into A) long-run growth and income movements. B) long-run growth and business cycle fluctuations. C) short-run growth and income movements. D) short-run growth and business cycle fluctuations. E) employment growth and business cycle fluctuations.
2)
Answer: B Diff: 2
Type: MC
3) New Keynesian Theory A) includes microeconomic foundations and does not rely on sticky wages or prices. B) specifies financial markets as the primary cause of business cycles. C) specifies shocks to technology cause business cycles. D) uses the same microeconomic foundations as other macro models. E) relies on sticky wages and prices but does not include microeconomic foundations.
3)
Answer: D Diff: 2
Type: MC
4) One consequence of government deficits is A) lower interest rates. B) redistribution of the tax burden from one group to another. C) reduced consumer spending. D) reduced government borrowing. E) lower taxes.
4)
Answer: B Diff: 2
Type: MC
5) According to the Lucas critique, the effects of changes in economic policy A) cannot always be predicted by looking at historical macroeconomic relationships. B) can be determined by looking at macroeconomic data. C) do not require macroeconomic theory. D) are known to the government. E) are easy to predict. Answer: A Diff: 2
Type: MC
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5)