Question 1

When drawn against the real interest rate,output supply increases if

Accepted Answer

A)  the present value of taxes decreases. 
B)  current capital increases. 
C)  the interest rate decreases. 
D)  future total productivity increases. 
A)  the present value of taxes decreases. 
B)  current capital increases. 
C)  the interest rate decreases. 
D)  future total productivity increases. B

Question 2

The assumption that current-period labor supply is positively related to the current-period real wage is justified as long as the

Accepted Answer

A)  income effect dominates the substitution effect in the short run. 
B)  income effect dominates the substitution effect in the long run. 
C)  substitution effect dominates the income effect in the short run. 
D)  substitution effect dominates the income effect in the long run. 
A)  income effect dominates the substitution effect in the short run. 
B)  income effect dominates the substitution effect in the long run. 
C)  substitution effect dominates the income effect in the short run. 
D)  substitution effect dominates the income effect in the long run. C

Question 3

When drawn against the real interest rate,the output demand curve shifts to the right when

Accepted Answer

A)  current total factor productivity z increases. 
B)  current total factor productivity z decreases. 
C)  future total factor productivity z' increases. 
D)  future total factor productivity z' decreases. 
A)  current total factor productivity z increases. 
B)  current total factor productivity z decreases. 
C)  future total factor productivity z' increases. 
D)  future total factor productivity z' decreases. C

Question 4

The equilibrium effects of a prospective future increase in total factor productivity include

Accepted Answer

A)  an increase in the real wage and an increase in the real interest rate. 
B)  an increase in the real wage and a decrease in the real interest rate. 
C)  a decrease in the real wage and an increase in the real interest rate. 
D)  a decrease in the real wage and a decrease in the real interest rate. 
A)  an increase in the real wage and an increase in the real interest rate. 
B)  an increase in the real wage and a decrease in the real interest rate. 
C)  a decrease in the real wage and an increase in the real interest rate. 
D)  a decrease in the real wage and a decrease in the real interest rate.

Question 5

The equilibrium effects of a temporary increase in government spending include

Accepted Answer

A)  an increase in the real wage and an increase in the real interest rate. 
B)  an increase in the real wage and a decrease in the real interest rate. 
C)  a decrease in the real wage and an increase in the real interest rate. 
D)  a decrease in the real wage and a decrease in the real interest rate. 
A)  an increase in the real wage and an increase in the real interest rate. 
B)  an increase in the real wage and a decrease in the real interest rate. 
C)  a decrease in the real wage and an increase in the real interest rate. 
D)  a decrease in the real wage and a decrease in the real interest rate.

Question 6

In the real intertemporal model with investment

Accepted Answer

A)  we abstract from labor/leisure choice. 
B)  consumers always save a constant fraction of their income. 
C)  there are many different consumers. 
D)  consumers make choices over current consumption and leisure, and future consumption and leisure. 
A)  we abstract from labor/leisure choice. 
B)  consumers always save a constant fraction of their income. 
C)  there are many different consumers. 
D)  consumers make choices over current consumption and leisure, and future consumption and leisure.

Question 7

The condition,MRS?,C = w,describes the representative consumer's

Accepted Answer

A)  investment decision. 
B)  consumption - savings decision. 
C)  current period work - leisure decision. 
D)  future period work - leisure decision. 
A)  investment decision. 
B)  consumption - savings decision. 
C)  current period work - leisure decision. 
D)  future period work - leisure decision.

Question 8

The condition,MRSC,C' = 1 + r,describes the representative consumer's

Accepted Answer

A)  investment decision. 
B)  consumption - savings decision. 
C)  current period work - leisure decision. 
D)  future period work - leisure decision. 
A)  investment decision. 
B)  consumption - savings decision. 
C)  current period work - leisure decision. 
D)  future period work - leisure decision.

Question 9

In general equilibrium

Accepted Answer

A)  supply equals demand for all goods in all periods. 
B)  supply equals demand for most goods in all periods. 
C)  supply equals demand in present value, but not in all periods. 
D)  prices are exogenous. 
A)  supply equals demand for all goods in all periods. 
B)  supply equals demand for most goods in all periods. 
C)  supply equals demand in present value, but not in all periods. 
D)  prices are exogenous.

Question 10

When drawn against the current real wage,the labor demand curve is

Accepted Answer

A)  upward sloping because the marginal product of labor rises with the quantity of labor employed. 
B)  upward sloping because the marginal product of labor declines with the quantity of labor employed. 
C)  downward sloping because the marginal product of labor rises with the quantity of labor employed. 
D)  downward sloping because the marginal product of labor declines with the quantity of labor employed. 
A)  upward sloping because the marginal product of labor rises with the quantity of labor employed. 
B)  upward sloping because the marginal product of labor declines with the quantity of labor employed. 
C)  downward sloping because the marginal product of labor rises with the quantity of labor employed. 
D)  downward sloping because the marginal product of labor declines with the quantity of labor employed.

Question 11

When drawn against the current real wage,the labor demand curve shift to the right if

Accepted Answer

A)  the interest rate increases. 
B)  current taxes increase. 
C)  total factor productivity increases. 
D)  future capital increases. 
A)  the interest rate increases. 
B)  current taxes increase. 
C)  total factor productivity increases. 
D)  future capital increases.

Question 12

The condition,MRS?,'C' = w ',describes the representative consumer's

Accepted Answer

A)  investment decision. 
B)  consumption - savings decision. 
C)  current period work - leisure decision. 
D)  future period work - leisure decision. 
A)  investment decision. 
B)  consumption - savings decision. 
C)  current period work - leisure decision. 
D)  future period work - leisure decision.

Question 13

The total multiplier of government expenditure is

Accepted Answer

A)  zero. 
B)  between zero and one. 
C)  one. 
D)  larger than one. 
A)  zero. 
B)  between zero and one. 
C)  one. 
D)  larger than one.

Question 14

A temporary increase in government spending that leads to only a small decline in lifetime wealth likely shifts the output demand curve to the

Accepted Answer

A)  right by more than the rightward shift in output supply. 
B)  right by less than the rightward shift in output supply. 
C)  left by more than the leftward shift in output supply. 
D)  left by less than the leftward shift in output supply. 
A)  right by more than the rightward shift in output supply. 
B)  right by less than the rightward shift in output supply. 
C)  left by more than the leftward shift in output supply. 
D)  left by less than the leftward shift in output supply.

Question 15

When drawn against current income,the slope of the C? ??? ? ?? ??? ? ? curve is equal to the marginal

Accepted Answer

A)  product of capital. 
B)  product of labor. 
C)  propensity to consume. 
D)  propensity to save. 
A)  product of capital. 
B)  product of labor. 
C)  propensity to consume. 
D)  propensity to save.

Question 16

In the real intertemporal model,an adverse sectoral shock acts to

Accepted Answer

A)  reduce real output and reduce the real interest rate. 
B)  increase real output and increase the real interest rate. 
C)  increase real output and reduce the real interest rate. 
D)  reduce real output and increase the real interest rate. 
A)  reduce real output and reduce the real interest rate. 
B)  increase real output and increase the real interest rate. 
C)  increase real output and reduce the real interest rate. 
D)  reduce real output and increase the real interest rate.

Question 17

A consumer may increase her saving by

Accepted Answer

A)  working more hours and consuming more goods in the present period. 
B)  working more hours and consuming fewer goods in the present period. 
C)  working fewer hours and consuming more goods in the present period. 
D)  working fewer hours and consuming fewer goods in the present period. 
A)  working more hours and consuming more goods in the present period. 
B)  working more hours and consuming fewer goods in the present period. 
C)  working fewer hours and consuming more goods in the present period. 
D)  working fewer hours and consuming fewer goods in the present period.

Question 18

Firms discount future profits at the interest rate r because

Accepted Answer

A)  it is the interest rate on their debt. 
B)  it is the same rate as for households. 
C)  Ricardian equivalence holds. 
D)  it has to equal the marginal productivity of capital in equilibrium. 
A)  it is the interest rate on their debt. 
B)  it is the same rate as for households. 
C)  Ricardian equivalence holds. 
D)  it has to equal the marginal productivity of capital in equilibrium.

Question 19

When drawn against the real interest rate,the output supply curve is upward sloping because labor supply is

Accepted Answer

A)  increasing in the real interest rate and labor demand is independent of the real interest rate. 
B)  decreasing in the real interest rate and labor demand is independent of the real interest rate. 
C)  independent of the real interest rate and labor demand is increasing in the real interest rate. 
D)  independent of the real interest rate and labor demand is decreasing in the real interest rate. 
A)  increasing in the real interest rate and labor demand is independent of the real interest rate. 
B)  decreasing in the real interest rate and labor demand is independent of the real interest rate. 
C)  independent of the real interest rate and labor demand is increasing in the real interest rate. 
D)  independent of the real interest rate and labor demand is decreasing in the real interest rate.

Question 20

When drawn against the real interest rate,the output supply curve unambiguously shifts to the right if

Accepted Answer

A)  current capital decreases. 
B)  current total factor productivity decreases. 
C)  future total factor productivity decreases. 
D)  current or future taxes increase. 
A)  current capital decreases. 
B)  current total factor productivity decreases. 
C)  future total factor productivity decreases. 
D)  current or future taxes increase.

When drawn against the real interest rate,output supply increases if

The assumption that current-period labor supply is positively related to the current-period real wage is justified as long as the

When drawn against the real interest rate,the output demand curve shifts to the right when

The equilibrium effects of a prospective future increase in total factor productivity include

The equilibrium effects of a temporary increase in government spending include

In the real intertemporal model with investment

The condition,MRS?,C = w,describes the representative consumer's

The condition,MRSC,C' = 1 + r,describes the representative consumer's

In general equilibrium

When drawn against the current real wage,the labor demand curve is

When drawn against the current real wage,the labor demand curve shift to the right if

The condition,MRS?,'C' = w ',describes the representative consumer's

The total multiplier of government expenditure is

A temporary increase in government spending that leads to only a small decline in lifetime wealth likely shifts the output demand curve to the

When drawn against current income,the slope of the C? ??? ? ?? ??? ? ? curve is equal to the marginal

In the real intertemporal model,an adverse sectoral shock acts to

A consumer may increase her saving by

Firms discount future profits at the interest rate r because

When drawn against the real interest rate,the output supply curve is upward sloping because labor supply is

When drawn against the real interest rate,the output supply curve unambiguously shifts to the right if

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption-Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters

Exam 11: A Real Intertemporal Model with Investment

When drawn against the real interest rate,output supply increases if

The assumption that current-period labor supply is positively related to the current-period real wage is justified as long as the

When drawn against the real interest rate,the output demand curve shifts to the right when

The equilibrium effects of a prospective future increase in total factor productivity include

The equilibrium effects of a temporary increase in government spending include

In the real intertemporal model with investment

The condition,MRS?,C = w,describes the representative consumer's

The condition,MRSC,C' = 1 + r,describes the representative consumer's

In general equilibrium

When drawn against the current real wage,the labor demand curve is

When drawn against the current real wage,the labor demand curve shift to the right if

The condition,MRS?,'C' = w ',describes the representative consumer's

The total multiplier of government expenditure is

A temporary increase in government spending that leads to only a small decline in lifetime wealth likely shifts the output demand curve to the

When drawn against current income,the slope of the C? ??? ? ?? ??? ? ? curve is equal to the marginal

In the real intertemporal model,an adverse sectoral shock acts to

A consumer may increase her saving by

Firms discount future profits at the interest rate r because

When drawn against the real interest rate,the output supply curve is upward sloping because labor supply is

When drawn against the real interest rate,the output supply curve unambiguously shifts to the right if

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption-Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters