Question 1

Output supply is increasing in the interest rate because

Accepted Answer

A)  labor demand is increasing in the interest rate. 
B)  labor demand is decreasing in the interest rate. 
C)  labor supply is increasing in the interest rate. 
D)  labor supply is decreasing in the interest rate. 
A)  labor demand is increasing in the interest rate. 
B)  labor demand is decreasing in the interest rate. 
C)  labor supply is increasing in the interest rate. 
D)  labor supply is decreasing in the interest rate.

Question 2

In the real intertemporal model with investment,there is intertemporal substitution with respect to

Accepted Answer

A)  consumption and leisure. 
B)  government spending. 
C)  capital. 
D)  current consumption. 
A)  consumption and leisure. 
B)  government spending. 
C)  capital. 
D)  current consumption.

Question 3

When drawn against the real interest rate,the optimal investment schedule shifts to the right if

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.

Question 4

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

Accepted Answer

A)  current government expenses increase. 
B)  future government expenses increase. 
C)  current total factor productivity increases. 
D)  the money supply increases. 
A)  current government expenses increase. 
B)  future government expenses increase. 
C)  current total factor productivity increases. 
D)  the money supply increases.

Question 5

Any increase in the present value of taxes implies

Accepted Answer

A)  an increase in lifetime wealth and an increase in the current labor supply. 
B)  an increase in lifetime wealth and a decrease in the current labor supply. 
C)  a decrease in lifetime wealth and an increase in the current labor supply. 
D)  a decrease in lifetime wealth and a decrease in the current labor supply. 
A)  an increase in lifetime wealth and an increase in the current labor supply. 
B)  an increase in lifetime wealth and a decrease in the current labor supply. 
C)  a decrease in lifetime wealth and an increase in the current labor supply. 
D)  a decrease in lifetime wealth and a decrease in the current labor supply.

Question 6

The marginal benefit from investment for a firm is equal to

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 7

The response of output following a natural disaster includes

Accepted Answer

A)  an increase in output demand and an increase in output supply. 
B)  an increase in output demand and a decrease in output supply. 
C)  a decrease in output demand and an increase in output supply. 
D)  a decrease in output demand and a decrease in output supply. 
A)  an increase in output demand and an increase in output supply. 
B)  an increase in output demand and a decrease in output supply. 
C)  a decrease in output demand and an increase in output supply. 
D)  a decrease in output demand and a decrease in output supply.

Question 8

At the end of the future period,in the real intertemporal model with investment

Accepted Answer

A)  the firm's capital becomes useless and is thrown away. 
B)  the firm's capital is used to produce more capital for the distant future. 
C)  the firm can convert capital one-for-one into consumption goods. 
D)  the firm's capital is converted into labor. 
A)  the firm's capital becomes useless and is thrown away. 
B)  the firm's capital is used to produce more capital for the distant future. 
C)  the firm can convert capital one-for-one into consumption goods. 
D)  the firm's capital is converted into labor.

Question 9

The marginal propensity to consume out of income

Accepted Answer

A)  is larger than one. 
B)  is equal to one. 
C)  is smaller than one. 
D)  varies around one. 
A)  is larger than one. 
B)  is equal to one. 
C)  is smaller than one. 
D)  varies around one.

Question 10

In determining the benefit of additional investment to the representative firm,we consider the marginal product of

Accepted Answer

A)  current capital. 
B)  future capital 
C)  current labor. 
D)  future labor. 
A)  current capital. 
B)  future capital 
C)  current labor. 
D)  future labor.

Question 11

What could result in an increase of consumption demand and a decrease in labor supply?

Accepted Answer

A)  a drop in current taxes 
B)  an increase in future taxes 
C)  a decrease in total factor productivity 
D)  an increase in government expenses 
A)  a drop in current taxes 
B)  an increase in future taxes 
C)  a decrease in total factor productivity 
D)  an increase in government expenses

Question 12

In response to a temporary increase in government spending,the representative consumer consumes

Accepted Answer

A)  more and takes more leisure. 
B)  more and takes less leisure. 
C)  less and takes more leisure. 
D)  less and takes less leisure. 
A)  more and takes more leisure. 
B)  more and takes less leisure. 
C)  less and takes more leisure. 
D)  less and takes less leisure.

Question 13

If the interest rate goes up,what happens to the investment demand curve?

Accepted Answer

A)  It shifts to the right. 
B)  It shift to the left. 
C)  It stays put. 
D)  We cannot tell. 
A)  It shifts to the right. 
B)  It shift to the left. 
C)  It stays put. 
D)  We cannot tell.

Question 14

The equilibrium effects of a temporary 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 15

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

Accepted Answer

A)  current government expenses increase. 
B)  future government expenses increase. 
C)  current taxes increase. 
D)  future taxes increase. 
A)  current government expenses increase. 
B)  future government expenses increase. 
C)  current taxes increase. 
D)  future taxes increase.

Question 16

Labor demand depends on the interest rate because

Accepted Answer

A)  household savings depend on the interest rate. 
B)  firms discount future profits. 
C)  of Ricardian equivalence. 
D)  Labor demand actually does not depend on the interest rate. 
A)  household savings depend on the interest rate. 
B)  firms discount future profits. 
C)  of Ricardian equivalence. 
D)  Labor demand actually does not depend on the interest rate.

Question 17

The marginal cost of investment for the firm is equal to

Accepted Answer

A)  1. 
B)  0. 
C)  the depreciation rate. 
D)  the depreciation rate plus the interest rate. 
A)  1. 
B)  0. 
C)  the depreciation rate. 
D)  the depreciation rate plus the interest rate.

Output supply is increasing in the interest rate because

In the real intertemporal model with investment,there is intertemporal substitution with respect to

When drawn against the real interest rate,the optimal investment schedule shifts to the right if

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

Any increase in the present value of taxes implies

The marginal benefit from investment for a firm is equal to

The response of output following a natural disaster includes

At the end of the future period,in the real intertemporal model with investment

The marginal propensity to consume out of income

In determining the benefit of additional investment to the representative firm,we consider the marginal product of

What could result in an increase of consumption demand and a decrease in labor supply?

In response to a temporary increase in government spending,the representative consumer consumes

If the interest rate goes up,what happens to the investment demand curve?

The equilibrium effects of a temporary increase in total factor productivity include

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

Labor demand depends on the interest rate because

The marginal cost of investment for the firm is equal to

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

Output supply is increasing in the interest rate because

In the real intertemporal model with investment,there is intertemporal substitution with respect to

When drawn against the real interest rate,the optimal investment schedule shifts to the right if

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

Any increase in the present value of taxes implies

The marginal benefit from investment for a firm is equal to

The response of output following a natural disaster includes

At the end of the future period,in the real intertemporal model with investment

The marginal propensity to consume out of income

In determining the benefit of additional investment to the representative firm,we consider the marginal product of

What could result in an increase of consumption demand and a decrease in labor supply?

In response to a temporary increase in government spending,the representative consumer consumes

If the interest rate goes up,what happens to the investment demand curve?

The equilibrium effects of a temporary increase in total factor productivity include

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

Labor demand depends on the interest rate because

The marginal cost of investment for the firm is equal to

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