Exam 12: Keynesian Business Cycle Analysis: Non Market Clearing Macroeconomics

The analysis that monetary policy is effective in the short-run but not in the long-run can be presented by which of the following statement?

(Multiple Choice)

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Question 21

Which of the following is true about the Keynesian aggregate supply (AS)curve?

(Multiple Choice)

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Question 22

In the Keynesian model of the business cycles,

(Multiple Choice)

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Question 23

What type of expectations hypothesis do the Keynesian and the classical models use to explain the impact of the fiscal and monetary policy on the full-employment output? Discuss.

(Essay)

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Question 24

Suppose the government decided to ease monetary policy,then increase taxes.In the short run in the Keynesian model,the effect of these policies would be to the real interest rate and the level of output.

(Multiple Choice)

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Question 25

A monopolistically competitive firm prices its product using the markup pricing formula P = 1.25MC,where MC is the marginal cost of producing an additional unit.Suppose the demand for the firm's product is given by Q = 2000 - 0.1P,so the revenue from selling Q units of the product is PQ = 2000P - 0.1P². a.If the marginal cost of producing each unit of the product is $10,000,calculate the price of the product,the quantity produced,and the firm's revenues,costs,and profits. b.Now suppose the marginal cost rises to $11,000.The firm can keep the price of the product unchanged,or it can change the product's price at a total cost of $700,000.Calculate the price,quantity,revenues,costs,and profits as in part (a)both for changing the price and leaving the price unchanged.Should the firm change the price of its product?

(Essay)

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Question 26

According to the Keynesian model of nominal-wage rigidity,

(Multiple Choice)

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Question 27

Using the Keynesian model,the effect of an increase in corporate taxes would be to cause in the real interest rate and in output in the short run.

(Multiple Choice)

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Question 28

The economy is currently in a recession due to a reduction in consumer confidence.Output and the real interest rate are below their levels prior to the recession.Six months later the economy has returned to its equilibrium level of output and the previous interest rate.Which of the following must have happened?

(Multiple Choice)

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Question 29

Describe the effects of an oil price shock in a Keynesian model;why are such supply shocks difficult to handle using macroeconomic stabilization policies?

(Essay)

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Question 30

The effort of a firm's workers depends on their real wage according to the following schedule: Real wage Effort (E) 16 10 17 13 18 18 19 22 20 25 21 26 The marginal product of labour is MPN = E(400 - 4N)/30. a.What is the efficiency wage? b.How many workers will the firm hire? c.Suppose an adverse productivity shock reduces the marginal product of labour to ?MPN = E(360 - 4N)/30.How would your answers to parts (a)and (b)change?

(Essay)

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Question 31

The Keynesian theory of nominal wage rigidity predicts that

(Multiple Choice)

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Question 32

Unanticipated increase in the government expenditures would

(Multiple Choice)

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Question 33

The idea that firms retain some workers in a recession,whom they would otherwise lay off,to avoid the costs of hiring and training,is called

(Multiple Choice)

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Question 34

Consider the following short run aggregate supply equation: Y = $\hat Y$ + b (P - Pᵉ),where Y is the real output, $\hat Y$ is the full employment output,P and Pᵉ are the actual and expected price levels,respectively.Which of the following is correct?

(Multiple Choice)

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Question 35

Which of the following statements is false?

(Multiple Choice)

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Question 36

The theory that firms will be slow to change their products' prices in response to changes in demand because there are costs to changing prices is called

(Multiple Choice)

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Question 37

Using the Keynesian model,the effect of a government-imposed ceiling on interest rates paid on personal chequing accounts that is lower than the current market interest rate would be to cause in the real interest rate and in output in the short run.

(Multiple Choice)

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Question 38

Keynesians are skeptical of the classical theory that recessions are periods of increased mismatch between workers and jobs because

(Multiple Choice)

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Question 39

Discuss the major problems that arise in practice in attempting to use aggregate demand management to stabilize the economy.

(Essay)

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Question 40

Showing 21 - 40 of 91

The analysis that monetary policy is effective in the short-run but not in the long-run can be presented by which of the following statement?

Which of the following is true about the Keynesian aggregate supply (AS)curve?

In the Keynesian model of the business cycles,

What type of expectations hypothesis do the Keynesian and the classical models use to explain the impact of the fiscal and monetary policy on the full-employment output? Discuss.

Suppose the government decided to ease monetary policy,then increase taxes.In the short run in the Keynesian model,the effect of these policies would be to the real interest rate and the level of output.

According to the Keynesian model of nominal-wage rigidity,

Using the Keynesian model,the effect of an increase in corporate taxes would be to cause in the real interest rate and in output in the short run.

Describe the effects of an oil price shock in a Keynesian model;why are such supply shocks difficult to handle using macroeconomic stabilization policies?

The Keynesian theory of nominal wage rigidity predicts that

Unanticipated increase in the government expenditures would

The idea that firms retain some workers in a recession,whom they would otherwise lay off,to avoid the costs of hiring and training,is called

Consider the following short run aggregate supply equation: Y = $\hat Y$ + b (P - Pᵉ),where Y is the real output, $\hat Y$ is the full employment output,P and Pᵉ are the actual and expected price levels,respectively.Which of the following is correct?

Which of the following statements is false?

The theory that firms will be slow to change their products' prices in response to changes in demand because there are costs to changing prices is called

Using the Keynesian model,the effect of a government-imposed ceiling on interest rates paid on personal chequing accounts that is lower than the current market interest rate would be to cause in the real interest rate and in output in the short run.

Keynesians are skeptical of the classical theory that recessions are periods of increased mismatch between workers and jobs because

Discuss the major problems that arise in practice in attempting to use aggregate demand management to stabilize the economy.

Introduction to Macroeconomics

The Measurement and Structure of the Canadian Economy

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lm-Fe Model: a General Framework for Macroeconomic Analysis

Exchange Rates, business Cycles, and Macroeconomic Policy

Classical Business Cycle Analysis: Market-Clearing Macroeconomics

Unemployment and Inflation

Monetary Policy and the Bank of Canada

Government Spending and Its Financing

Filters

Exam 12: Keynesian Business Cycle Analysis: Non Market Clearing Macroeconomics

The analysis that monetary policy is effective in the short-run but not in the long-run can be presented by which of the following statement?

Which of the following is true about the Keynesian aggregate supply (AS)curve?

In the Keynesian model of the business cycles,

What type of expectations hypothesis do the Keynesian and the classical models use to explain the impact of the fiscal and monetary policy on the full-employment output? Discuss.

Suppose the government decided to ease monetary policy,then increase taxes.In the short run in the Keynesian model,the effect of these policies would be to ________ the real interest rate and ________ the level of output.

According to the Keynesian model of nominal-wage rigidity,

Using the Keynesian model,the effect of an increase in corporate taxes would be to cause ________ in the real interest rate and ________ in output in the short run.

Describe the effects of an oil price shock in a Keynesian model;why are such supply shocks difficult to handle using macroeconomic stabilization policies?

The Keynesian theory of nominal wage rigidity predicts that

Unanticipated increase in the government expenditures would

The idea that firms retain some workers in a recession,whom they would otherwise lay off,to avoid the costs of hiring and training,is called

Consider the following short run aggregate supply equation: Y = Y^\hat YY^ + b (P - Pᵉ),where Y is the real output, Y^\hat YY^ is the full employment output,P and Pᵉ are the actual and expected price levels,respectively.Which of the following is correct?

Which of the following statements is false?

The theory that firms will be slow to change their products' prices in response to changes in demand because there are costs to changing prices is called

Using the Keynesian model,the effect of a government-imposed ceiling on interest rates paid on personal chequing accounts that is lower than the current market interest rate would be to cause ________ in the real interest rate and ________ in output in the short run.

Keynesians are skeptical of the classical theory that recessions are periods of increased mismatch between workers and jobs because

Discuss the major problems that arise in practice in attempting to use aggregate demand management to stabilize the economy.

Introduction to Macroeconomics

The Measurement and Structure of the Canadian Economy

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lm-Fe Model: a General Framework for Macroeconomic Analysis

Exchange Rates, business Cycles, and Macroeconomic Policy

Classical Business Cycle Analysis: Market-Clearing Macroeconomics

Unemployment and Inflation

Monetary Policy and the Bank of Canada

Government Spending and Its Financing

Filters

Suppose the government decided to ease monetary policy,then increase taxes.In the short run in the Keynesian model,the effect of these policies would be to the real interest rate and the level of output.

Using the Keynesian model,the effect of an increase in corporate taxes would be to cause in the real interest rate and in output in the short run.

Consider the following short run aggregate supply equation: Y = $\hat Y$ + b (P - Pᵉ),where Y is the real output, $\hat Y$ is the full employment output,P and Pᵉ are the actual and expected price levels,respectively.Which of the following is correct?

Using the Keynesian model,the effect of a government-imposed ceiling on interest rates paid on personal chequing accounts that is lower than the current market interest rate would be to cause in the real interest rate and in output in the short run.