Question 1

Assume that the substitution effect dominates the income effect.When workers experience a positive price surprise,they

Accepted Answer

A) correctly perceive that their real wage rate has fallen,which leads them to work fewer hours. 
B) incorrectly perceive that their real wage rate has fallen,which leads them to work fewer hours. 
C) correctly perceive that their real wage rate has risen,which leads them to work more hours. 
D) incorrectly perceive that their real wage rate has risen,which leads them to work more hours. 
A) correctly perceive that their real wage rate has fallen,which leads them to work fewer hours. 
B) incorrectly perceive that their real wage rate has fallen,which leads them to work fewer hours. 
C) correctly perceive that their real wage rate has risen,which leads them to work more hours. 
D) incorrectly perceive that their real wage rate has risen,which leads them to work more hours.

Question 2

The new classical theoretical critique of the existing macroeconomic models is based on

Accepted Answer

A) the way people form their expectations. 
B) the nature of the tradeoff between inflation and growth. 
C) wages and labor market equilibrium. 
D) the link between the money market and the goods market. 
A) the way people form their expectations. 
B) the nature of the tradeoff between inflation and growth. 
C) wages and labor market equilibrium. 
D) the link between the money market and the goods market.

Question 3

Reduction of government regulation is a stimulative aggregate supply policy.

Accepted Answer

A) True 
 B)False

Question 4

The real business cycle theory places little emphasis on shocks to technology.

Accepted Answer

A) True 
 B)False

Question 5

People are said to have rational expectations if they

Accepted Answer

A) use all available information in forming their expectations. 
B) assume that this year's inflation rate will be equal to the average inflation rate over the past 10 years. 
C) merely guess at the inflation rate. 
D) assume that this year's inflation rate will be the same as last year's inflation rate. 
A) use all available information in forming their expectations. 
B) assume that this year's inflation rate will be equal to the average inflation rate over the past 10 years. 
C) merely guess at the inflation rate. 
D) assume that this year's inflation rate will be the same as last year's inflation rate.

Question 6

If the stock of money is $40 billion,velocity is 3,and real output is $60 billion,what is the price level?

Accepted Answer

A) 0.5 
B) 2 
C) 2.5 
D) 4 
A) 0.5 
B) 2 
C) 2.5 
D) 4

Question 7

The Economic Recovery Tax Act of 1981 allowed firms to depreciate their capital at a very rapid rate for tax purposes.This

Accepted Answer

A) increased the tax liability of firms and discouraged them from investing. 
B) decreased tax liability and encouraged investment. 
C) increased the tax liability of firms and encouraged them to invest. 
D) decreased tax liability and discouraged investment. 
A) increased the tax liability of firms and discouraged them from investing. 
B) decreased tax liability and encouraged investment. 
C) increased the tax liability of firms and encouraged them to invest. 
D) decreased tax liability and discouraged investment.

Assume that the substitution effect dominates the income effect.When workers experience a positive price surprise,they

The new classical theoretical critique of the existing macroeconomic models is based on

Reduction of government regulation is a stimulative aggregate supply policy.

The real business cycle theory places little emphasis on shocks to technology.

People are said to have rational expectations if they

If the stock of money is $40 billion,velocity is 3,and real output is $60 billion,what is the price level?

The Economic Recovery Tax Act of 1981 allowed firms to depreciate their capital at a very rapid rate for tax purposes.This

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand,supply,and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment,inflation,and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

International Trade, comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

Filters

Exam 18: Alternative Views in Macroeconomics

Assume that the substitution effect dominates the income effect.When workers experience a positive price surprise,they

The new classical theoretical critique of the existing macroeconomic models is based on

Reduction of government regulation is a stimulative aggregate supply policy.

The real business cycle theory places little emphasis on shocks to technology.

People are said to have rational expectations if they

If the stock of money is $40 billion,velocity is 3,and real output is $60 billion,what is the price level?

The Economic Recovery Tax Act of 1981 allowed firms to depreciate their capital at a very rapid rate for tax purposes.This

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand,supply,and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment,inflation,and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

International Trade, comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

Filters