Question 1

In the new classical model,the aggregate supply schedule depends on

Accepted Answer

A) the expected level of the money stock. 
B) the expected price level. 
C) the expected values of fiscal policy variables and other possible determinants of aggregate demand. 
D) Both a and c 
E) All of the above 
A) the expected level of the money stock. 
B) the expected price level. 
C) the expected values of fiscal policy variables and other possible determinants of aggregate demand. 
D) Both a and c 
E) All of the above B

Question 2

Which of the following is the most likely cause of most recessions according to the new classical model?

Accepted Answer

A) a change in the money supply. 
B) an increase in taxation and government spending. 
C) a fall in expected profits. 
D) a rise in the price of oil. 
E) an unanticipated change in the money supply. 
A) a change in the money supply. 
B) an increase in taxation and government spending. 
C) a fall in expected profits. 
D) a rise in the price of oil. 
E) an unanticipated change in the money supply. E

Question 3

According to the new classical system,an unanticipated increase in the money stock

Accepted Answer

A) will shift the aggregate supply schedule only. 
B) will shift the aggregate demand schedule only. 
C) will shift both the aggregate demand and aggregate supply schedules. 
D) None of the above 
A) will shift the aggregate supply schedule only. 
B) will shift the aggregate demand schedule only. 
C) will shift both the aggregate demand and aggregate supply schedules. 
D) None of the above B

Question 4

Stable velocity of money is crucial component of the

Accepted Answer

A) monetarist model. 
B) Keynesian model. 
C) new Keynesian model. 
D) IS-LM model. 
A) monetarist model. 
B) Keynesian model. 
C) new Keynesian model. 
D) IS-LM model.

Question 5

Will systematic and,therefore,predictable changes in aggregate demand affect the level of real output in the new classical and monetarist models? How about in the Keynesian model.Explain why or why not.

Accepted Answer

Systematic and,therefore,predictable cha

Question 6

In which model does there not exist a tradeoff between higher inflation and lower unemployment?

Accepted Answer

A) monetarist 
B) real business cycle 
C) new classical 
D) classical 
E) a tradeoff exists in all of the above 
A) monetarist 
B) real business cycle 
C) new classical 
D) classical 
E) a tradeoff exists in all of the above

Question 7

Why are disagreements among the various schools of macroeconomic thought long-lasting and difficult to resolve?

Accepted Answer

Because,in economics,there are no opport

Question 8

The best argument against monetarists' arguments that steady money growth would prevent fluctuations in inflation and unemployment is that:

Accepted Answer

A) the government has best control over fiscal policy and should focus on that. 
B) large fluctuations in the money supply cannot occur because the supply of money is limited. 
C) steady money growth does not necessarily mean steady aggregate demand if velocity is not stable. 
D) steady growth in the money supply percents fluctuations in output only if aggregate prices are constant. 
A) the government has best control over fiscal policy and should focus on that. 
B) large fluctuations in the money supply cannot occur because the supply of money is limited. 
C) steady money growth does not necessarily mean steady aggregate demand if velocity is not stable. 
D) steady growth in the money supply percents fluctuations in output only if aggregate prices are constant.

Question 9

According to the new classical economics,predictable changes in aggregate demand

Accepted Answer

A) affect the level of real output. 
B) will not affect the level of real output. 
C) may or may not affect the level of real output. 
D) None of the above 
A) affect the level of real output. 
B) will not affect the level of real output. 
C) may or may not affect the level of real output. 
D) None of the above

Question 10

Which of the following models depicts the role of money as affecting only the price level in the short run?

Accepted Answer

A) The new classical model 
B) The Keynesian model 
C) The real business cycle model 
D) The monetarist model 
A) The new classical model 
B) The Keynesian model 
C) The real business cycle model 
D) The monetarist model

Question 11

With respect to the demand side,the classical model excludes

Accepted Answer

A) exogenous changes in investment 
B) exogenous changes in government spending. 
C) exogenous changes in taxes. 
D) exogenous changes in money demand. 
E) All of the above 
A) exogenous changes in investment 
B) exogenous changes in government spending. 
C) exogenous changes in taxes. 
D) exogenous changes in money demand. 
E) All of the above

Question 12

Which of the following statements is (are)correct?

Accepted Answer

A) There is no fundamental difference between the monetarist and the Keynesian theories regarding whether business cycles are demand-driven or supply-driven. 
B) In both the monetarist and Keynesian models,changes in the expected price level play an important role in the position of aggregate supply. 
C) In both the monetarist and Keynesian models,the assumption of constant velocity is critical. 
D) Both a and b 
E) Both a and c 
A) There is no fundamental difference between the monetarist and the Keynesian theories regarding whether business cycles are demand-driven or supply-driven. 
B) In both the monetarist and Keynesian models,changes in the expected price level play an important role in the position of aggregate supply. 
C) In both the monetarist and Keynesian models,the assumption of constant velocity is critical. 
D) Both a and b 
E) Both a and c

Question 13

What do each of the major modern macroeconomic theories predict will happen to the real wages during recessions? Explain your answer for each model.

Accepted Answer

The classical and real business cycle mo

Question 14

During the 1990s,investment expanded quite rapidly and stock prices rose dramatically.How do you think a classical/real business cycle proponent would explain this boom? How would a Keynesian/new Keynesian explain this boom?

Accepted Answer

The classical/ real business cycle model

Question 15

Which of the following is the most likely cause of a recession according to the real business cycle model?

Accepted Answer

A) an unanticipated change in the money supply. 
B) an increase in taxation,government spending,and regulation. 
C) a fall in expected profits. 
D) an anticipated change in the money supply. 
E) none of the above. 
A) an unanticipated change in the money supply. 
B) an increase in taxation,government spending,and regulation. 
C) a fall in expected profits. 
D) an anticipated change in the money supply. 
E) none of the above.

Question 16

With respect to the demand side,the Keynesian model

Accepted Answer

A) includes monetary factors. 
B) provides a role for government spending and taxes. 
C) includes autonomous investment. 
D) All of the above 
E) None of the above 
A) includes monetary factors. 
B) provides a role for government spending and taxes. 
C) includes autonomous investment. 
D) All of the above 
E) None of the above

Question 17

The Keynesian aggregate supply schedule slopes upward because of

Accepted Answer

A) unstable expectations. 
B) inflexible wages and prices. 
C) changes in technology. 
D) differences between actual and expected price levels. 
A) unstable expectations. 
B) inflexible wages and prices. 
C) changes in technology. 
D) differences between actual and expected price levels.

Question 18

The arguments against the use of active stabilization policy include all of the following except:

Accepted Answer

A) the responsiveness of voluntary unemployment to changes in GDP. 
B) the existence of policy lags. 
C) weak macroeconomic forecasting abilities. 
D) the possibility of policy errors because of limited information. 
A) the responsiveness of voluntary unemployment to changes in GDP. 
B) the existence of policy lags. 
C) weak macroeconomic forecasting abilities. 
D) the possibility of policy errors because of limited information.

Question 19

Which of the following statements is (are)correct? In the classical system,

Accepted Answer

A) aggregate demand is the primary determinate of the natural rate of output and employment. 
B) both output and employment are self-adjusting towards the natural rates of output and employment. 
C) changes in aggregate supply drives changes in output in the short-run and in the long-run. 
D) only output is self-adjusting to the supply-determined full-employment levels. 
A) aggregate demand is the primary determinate of the natural rate of output and employment. 
B) both output and employment are self-adjusting towards the natural rates of output and employment. 
C) changes in aggregate supply drives changes in output in the short-run and in the long-run. 
D) only output is self-adjusting to the supply-determined full-employment levels.

Question 20

Which of the following schools of thought are policy interventionists favoring activist aggregate demand management to stabilize output and employment?

Accepted Answer

A) Keynesians 
B) Monetarism 
C) The new classical economics 
D) The classical economics 
E) None of the above 
A) Keynesians 
B) Monetarism 
C) The new classical economics 
D) The classical economics 
E) None of the above

In the new classical model,the aggregate supply schedule depends on

Which of the following is the most likely cause of most recessions according to the new classical model?

According to the new classical system,an unanticipated increase in the money stock

Stable velocity of money is crucial component of the

Will systematic and,therefore,predictable changes in aggregate demand affect the level of real output in the new classical and monetarist models? How about in the Keynesian model.Explain why or why not.

In which model does there not exist a tradeoff between higher inflation and lower unemployment?

Why are disagreements among the various schools of macroeconomic thought long-lasting and difficult to resolve?

The best argument against monetarists' arguments that steady money growth would prevent fluctuations in inflation and unemployment is that:

According to the new classical economics,predictable changes in aggregate demand

Which of the following models depicts the role of money as affecting only the price level in the short run?

With respect to the demand side,the classical model excludes

Which of the following statements is (are)correct?

What do each of the major modern macroeconomic theories predict will happen to the real wages during recessions? Explain your answer for each model.

During the 1990s,investment expanded quite rapidly and stock prices rose dramatically.How do you think a classical/real business cycle proponent would explain this boom? How would a Keynesian/new Keynesian explain this boom?

Which of the following is the most likely cause of a recession according to the real business cycle model?

With respect to the demand side,the Keynesian model

The Keynesian aggregate supply schedule slopes upward because of

The arguments against the use of active stabilization policy include all of the following except:

Which of the following statements is (are)correct? In the classical system,

Which of the following schools of thought are policy interventionists favoring activist aggregate demand management to stabilize output and employment?

Introduction

Measurement of Macroeconomic Variables

Classical Macroeconomics I: Output and Employment

Classical Macroeconomics II: Money,prices,and Interest

Keynesian System I: the Role of Aggregate Demand

Keynesian System II: Money,interest,and Income

Keynesian System III: Policy Effects in the Is-Lm Model

Keynesian System Iv: Aggregate Supply and Demand

The Monetarist Counterrevolution

Output,inflation,and Unemployment: Alternative Views

New Classical Economics

Real Business Cycles and New Keynesian Economics

Exchange Rates and the International Monetary System

Monetary and Fiscal Policy in the Open Economy

Money,the Banking System,and Interest Rates

Optimal Monetary Policy

Fiscal Policy

Policies for Intermediate-Run Growth

Long-Run Economic Growth: Origins of the Wealth of Nations

Filters

Exam 13: Macroeconomic Models:a Summary

In the new classical model,the aggregate supply schedule depends on

Which of the following is the most likely cause of most recessions according to the new classical model?

According to the new classical system,an unanticipated increase in the money stock

Stable velocity of money is crucial component of the

Will systematic and,therefore,predictable changes in aggregate demand affect the level of real output in the new classical and monetarist models? How about in the Keynesian model.Explain why or why not.

In which model does there not exist a tradeoff between higher inflation and lower unemployment?

Why are disagreements among the various schools of macroeconomic thought long-lasting and difficult to resolve?

The best argument against monetarists' arguments that steady money growth would prevent fluctuations in inflation and unemployment is that:

According to the new classical economics,predictable changes in aggregate demand

Which of the following models depicts the role of money as affecting only the price level in the short run?

With respect to the demand side,the classical model excludes

Which of the following statements is (are)correct?

What do each of the major modern macroeconomic theories predict will happen to the real wages during recessions? Explain your answer for each model.

During the 1990s,investment expanded quite rapidly and stock prices rose dramatically.How do you think a classical/real business cycle proponent would explain this boom? How would a Keynesian/new Keynesian explain this boom?

Which of the following is the most likely cause of a recession according to the real business cycle model?

With respect to the demand side,the Keynesian model

The Keynesian aggregate supply schedule slopes upward because of

The arguments against the use of active stabilization policy include all of the following except:

Which of the following statements is (are)correct? In the classical system,

Which of the following schools of thought are policy interventionists favoring activist aggregate demand management to stabilize output and employment?

Introduction

Measurement of Macroeconomic Variables

Classical Macroeconomics I: Output and Employment

Classical Macroeconomics II: Money,prices,and Interest

Keynesian System I: the Role of Aggregate Demand

Keynesian System II: Money,interest,and Income

Keynesian System III: Policy Effects in the Is-Lm Model

Keynesian System Iv: Aggregate Supply and Demand

The Monetarist Counterrevolution

Output,inflation,and Unemployment: Alternative Views

New Classical Economics

Real Business Cycles and New Keynesian Economics

Exchange Rates and the International Monetary System

Monetary and Fiscal Policy in the Open Economy

Money,the Banking System,and Interest Rates

Optimal Monetary Policy

Fiscal Policy

Policies for Intermediate-Run Growth

Long-Run Economic Growth: Origins of the Wealth of Nations

Filters