Question 1

In the long run, real GDP is determined by:

Accepted Answer

A)  low and stable inflation 
B)  real forces in the economy such as investment, productivity, and technology 
C)  very low rates of unemployment 
D)  low tax rates 
E)  low oil prices 
A)  low and stable inflation 
B)  real forces in the economy such as investment, productivity, and technology 
C)  very low rates of unemployment 
D)  low tax rates 
E)  low oil prices

Question 2

The credibility of the central bank:

Accepted Answer

A)  promotes long-run growth 
B)  is irrelevant for controlling inflation 
C)  is crucial for controlling inflation and stabilizing output 
D)  promotes sensible fiscal policy 
E)  implies low interest rates 
A)  promotes long-run growth 
B)  is irrelevant for controlling inflation 
C)  is crucial for controlling inflation and stabilizing output 
D)  promotes sensible fiscal policy 
E)  implies low interest rates

Question 3

The reason(s) to believe that health spending as a share of GDP will continue to rise over time is/are:

Accepted Answer

A)  the retirement of the baby boomer generation 
B)  as people's incomes rise, among the most valuable goods they can purchase are additional life and health 
C)  increased life expectancy 
D)  All of these answers are correct. 
E)  None of these answers are correct. 
A)  the retirement of the baby boomer generation 
B)  as people's incomes rise, among the most valuable goods they can purchase are additional life and health 
C)  increased life expectancy 
D)  All of these answers are correct. 
E)  None of these answers are correct.

Question 4

The Asian and Argentinean crises have led China to:

Accepted Answer

A)  rely on inflation taxes 
B)  allow its currency to float 
C)  decrease its domestic investment 
D)  maintain strict capital controls 
E)  keep interest rates close to zero 
A)  rely on inflation taxes 
B)  allow its currency to float 
C)  decrease its domestic investment 
D)  maintain strict capital controls 
E)  keep interest rates close to zero

Question 5

The accurate calculation of potential output is important because:

Accepted Answer

A)  it is necessary to calculate the size of short-run output fluctuations 
B)  we need it to find inflation rates 
C)  policymakers can make serious errors about the state of the economy 
D)  without it, we cannot determine long-run growth rates 
E)  All of these answers are correct. 
A)  it is necessary to calculate the size of short-run output fluctuations 
B)  we need it to find inflation rates 
C)  policymakers can make serious errors about the state of the economy 
D)  without it, we cannot determine long-run growth rates 
E)  All of these answers are correct.

Question 6

Standards of living in the long run have been improved by higher inflation.

Accepted Answer

A) True 
 B)False

Question 7

In the long run, the unemployment rate is:

Accepted Answer

A)  zero 
B)  determined primarily by cyclical features of the labor market 
C)  determined primarily by structural features of the labor market 
D)  determined primarily by the business cycle 
E)  indeterminate 
A)  zero 
B)  determined primarily by cyclical features of the labor market 
C)  determined primarily by structural features of the labor market 
D)  determined primarily by the business cycle 
E)  indeterminate

Question 8

In the short run:

Accepted Answer

A)  money is not neutral 
B)  there is no trade-off between inflation and unemployment 
C)  the inflation and unemployment rates are zero 
D)  steady-state growth is a constant 2 percent 
E)  there is constant tension between inflation and unemployment 
A)  money is not neutral 
B)  there is no trade-off between inflation and unemployment 
C)  the inflation and unemployment rates are zero 
D)  steady-state growth is a constant 2 percent 
E)  there is constant tension between inflation and unemployment

Question 9

Different rates of economic growth across countries reflect:

Accepted Answer

A)  differences in saving rates 
B)  differences in initial endowments 
C)  the principle of transition dynamics 
D)  All of these answers are correct. 
E)  None of these answers are correct. 
A)  differences in saving rates 
B)  differences in initial endowments 
C)  the principle of transition dynamics 
D)  All of these answers are correct. 
E)  None of these answers are correct.

Question 10

In the long run, real GDP is determined by very low rates of unemployment.

Accepted Answer

A) True 
 B)False

Question 11

In the short run, inflation has inertia.

Accepted Answer

A) True 
 B)False

Question 12

In the late 1990s, it was likely that:

Accepted Answer

A)  the GDP gap was almost zero 
B)  actual GDP grew more slowly than it had in the previous 20 years 
C)  the GDP gap was larger than it had been in the previous 20 years 
D)  potential GDP grew faster than it had in the previous 20 years 
E)  None of these answers are correct. 
A)  the GDP gap was almost zero 
B)  actual GDP grew more slowly than it had in the previous 20 years 
C)  the GDP gap was larger than it had been in the previous 20 years 
D)  potential GDP grew faster than it had in the previous 20 years 
E)  None of these answers are correct.

Question 13

According to the principle of transition dynamics, we should expect China's economy to:

Accepted Answer

A)  grow at a relatively high rate forever 
B)  grow relatively slowly now but speed up over time 
C)  grow relatively fast now but slow down over time 
D)  catch up to the United States in the next 50 years or so 
E)  reach its steady state by the year 2100 
A)  grow at a relatively high rate forever 
B)  grow relatively slowly now but speed up over time 
C)  grow relatively fast now but slow down over time 
D)  catch up to the United States in the next 50 years or so 
E)  reach its steady state by the year 2100

Question 14

Which of the following is NOT one of the questions left unanswered at the end of the text?

Accepted Answer

A)  What are the best institutions in a wide range of settings? 
B)  Why do countries have different investment rates, technologies, and total factor productivity levels? 
C)  What is the relationship between money and output in the very long run? 
D)  How can policymakers lock in the credibility gains in monetary policy and the low inflation that have been achieved? 
E)  How do we measure potential output, and therefore short-run output, in practice? 
A)  What are the best institutions in a wide range of settings? 
B)  Why do countries have different investment rates, technologies, and total factor productivity levels? 
C)  What is the relationship between money and output in the very long run? 
D)  How can policymakers lock in the credibility gains in monetary policy and the low inflation that have been achieved? 
E)  How do we measure potential output, and therefore short-run output, in practice?

Question 15

With economic growth, we should see low income countries like China and India:

Accepted Answer

A)  pollute less 
B)  see significant brain drain 
C)  contribute to the global stock of knowledge 
D)  demand fewer natural resources 
E)  begin to close their economies to trade 
A)  pollute less 
B)  see significant brain drain 
C)  contribute to the global stock of knowledge 
D)  demand fewer natural resources 
E)  begin to close their economies to trade

In the long run, real GDP is determined by:

The credibility of the central bank:

The reason(s) to believe that health spending as a share of GDP will continue to rise over time is/are:

The Asian and Argentinean crises have led China to:

The accurate calculation of potential output is important because:

Standards of living in the long run have been improved by higher inflation.

In the long run, the unemployment rate is:

In the short run:

Different rates of economic growth across countries reflect:

In the long run, real GDP is determined by very low rates of unemployment.

In the short run, inflation has inertia.

In the late 1990s, it was likely that:

According to the principle of transition dynamics, we should expect China's economy to:

Which of the following is NOT one of the questions left unanswered at the end of the text?

With economic growth, we should see low income countries like China and India:

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Filters

Exam 21: Parting Thoughts

In the long run, real GDP is determined by:

The credibility of the central bank:

The reason(s) to believe that health spending as a share of GDP will continue to rise over time is/are:

The Asian and Argentinean crises have led China to:

The accurate calculation of potential output is important because:

Standards of living in the long run have been improved by higher inflation.

In the long run, the unemployment rate is:

In the short run:

Different rates of economic growth across countries reflect:

In the long run, real GDP is determined by very low rates of unemployment.

In the short run, inflation has inertia.

In the late 1990s, it was likely that:

According to the principle of transition dynamics, we should expect China's economy to:

Which of the following is NOT one of the questions left unanswered at the end of the text?

With economic growth, we should see low income countries like China and India:

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Filters