Question 1

Once people believe the Fed's commitment to keep unemployment at the natural rate,the Fed can reduce unemployment below the natural rate

Accepted Answer

A) in both the short run and the long run. 
B) in both the short run and the long run,but only after changing peoples' expectations. 
C) in the long run,but not the short run. 
D) in the short run,but not in the long run. 
E) none of the above 
A) in both the short run and the long run. 
B) in both the short run and the long run,but only after changing peoples' expectations. 
C) in the long run,but not the short run. 
D) in the short run,but not in the long run. 
E) none of the above

Question 2

Republican administrations generally are relatively more concerned about which of the following?

Accepted Answer

A) increasing expenditures 
B) reducing the rate of inflation 
C) reducing unemployment 
D) raising taxes 
E) none of the above 
A) increasing expenditures 
B) reducing the rate of inflation 
C) reducing unemployment 
D) raising taxes 
E) none of the above

Question 3

Econometric models of the U.S.economy generally agree

Accepted Answer

A) on the quantitative impact of monetary policy over a horizon of several years. 
B) that an increase in money growth will increase output in the short run. 
C) that an increase in money growth will decrease output in the short run. 
D) that an increase in money growth will decrease output in the long run. 
E) that "rational expectations" is the best way to generate policy forecasts. 
A) on the quantitative impact of monetary policy over a horizon of several years. 
B) that an increase in money growth will increase output in the short run. 
C) that an increase in money growth will decrease output in the short run. 
D) that an increase in money growth will decrease output in the long run. 
E) that "rational expectations" is the best way to generate policy forecasts.

Question 4

Game theory analysis of macro policy suggests that as voters become more short-sighted

Accepted Answer

A) policy makers will be tempted to raise taxes. 
B) policy makers will be forced to balance the budget. 
C) policy makers will adopt policies today to achieve balanced budgets in the future. 
D) all of the above 
E) none of the above 
A) policy makers will be tempted to raise taxes. 
B) policy makers will be forced to balance the budget. 
C) policy makers will adopt policies today to achieve balanced budgets in the future. 
D) all of the above 
E) none of the above

Question 5

Which of the following statements is true about the United States over the past fifty years?

Accepted Answer

A) there is no evidence of political business cycles in the United States 
B) the debt-to-GDP ratio has been roughly constant 
C) under either party,output growth has been generally higher in the year preceding an election than in other years 
D) none of the above 
A) there is no evidence of political business cycles in the United States 
B) the debt-to-GDP ratio has been roughly constant 
C) under either party,output growth has been generally higher in the year preceding an election than in other years 
D) none of the above

Question 6

Which of the following was one of the main rules in the 1990 "Budget Enforcement Act"?

Accepted Answer

A) flat tax rate 
B) PAYGO rule 
C) indexation of income tax brackets 
D) consumption tax 
E) none of the above 
A) flat tax rate 
B) PAYGO rule 
C) indexation of income tax brackets 
D) consumption tax 
E) none of the above

Question 7

As uncertainty about the effects of policy on output decreases,we would expect that

Accepted Answer

A) policy makers would be more frequently implement fine tuning policies. 
B) policy makers would implement more active policies. 
C) policy makers would implement less active policies. 
D) both A and B 
E) both A and C 
A) policy makers would be more frequently implement fine tuning policies. 
B) policy makers would implement more active policies. 
C) policy makers would implement less active policies. 
D) both A and B 
E) both A and C

Question 8

Which of the following was one of the main rules in the 1990 "Budget Enforcement Act"?

Accepted Answer

A) flat tax rate 
B) spending caps 
C) indexation of income tax brackets 
D) consumption tax 
E) none of the above 
A) flat tax rate 
B) spending caps 
C) indexation of income tax brackets 
D) consumption tax 
E) none of the above

Question 9

The Masstricht treaty set the budget ratio to GDP to be ________ in order for countries to qualify to join the Euro area.

Accepted Answer

A) below 60% 
B) below 70% 
C) below 80% 
D) below 90% 
A) below 60% 
B) below 70% 
C) below 80% 
D) below 90%

Question 10

Assume that political business cycles do NOT exist.Given this assumption,we would expect,all else fixed,the output growth to be highest in which period?

Accepted Answer

A) just prior to an election 
B) just after an election 
C) in the first year of an administration 
D) in the second year of an administration 
E) none of the above 
A) just prior to an election 
B) just after an election 
C) in the first year of an administration 
D) in the second year of an administration 
E) none of the above

Question 11

The hostage taking example was developed by

Accepted Answer

A) John Nash. 
B) Kydland and Prescott. 
C) John Harsanyi. 
D) Reinhard Selten. 
A) John Nash. 
B) Kydland and Prescott. 
C) John Harsanyi. 
D) Reinhard Selten.

Question 12

Based on an analysis of macroeconomic outcomes under Republican and Democratic administrations,we would expect which of the following to occur?

Accepted Answer

A) growth rates to be generally higher under Republican administrations. 
B) macroeconomic policy to be relatively contractionary under Democratic administrations. 
C) unemployment rates to be generally higher under Democratic administrations. 
D) inflation rates to be generally lower under Democratic administrations. 
E) none of the above 
A) growth rates to be generally higher under Republican administrations. 
B) macroeconomic policy to be relatively contractionary under Democratic administrations. 
C) unemployment rates to be generally higher under Democratic administrations. 
D) inflation rates to be generally lower under Democratic administrations. 
E) none of the above

Question 13

Use "wars of attrition" to explain the debate about deficit reduction.

Accepted Answer

When country is facing large budget defi

Question 14

Analysis of U.S.growth rates shows that growth rate of output tends to be highest in which year of a presidential administration?

Accepted Answer

A) the first 
B) the second 
C) the third 
D) the fourth 
A) the first 
B) the second 
C) the third 
D) the fourth

Question 15

During republican presidential administration since 1948,economic growth was highest in ________ year of the administration?

Accepted Answer

A) first 
B) second 
C) third 
D) fourth 
A) first 
B) second 
C) third 
D) fourth

Question 16

For this question,assume that the there exists uncertainty about the impact of monetary policy on the macroeconomy.Given this information,it would be most appropriate for the central bank to increase money growth

Accepted Answer

A) at the midpoint of a recession. 
B) by more than the increase that will yield the desired response. 
C) by less than the increase that will yield the desired response. 
D) by an amount equal to the increase that will yield the desired response. 
E) only after it is certain that the economy has entered a recession. 
A) at the midpoint of a recession. 
B) by more than the increase that will yield the desired response. 
C) by less than the increase that will yield the desired response. 
D) by an amount equal to the increase that will yield the desired response. 
E) only after it is certain that the economy has entered a recession.

Question 17

In macroeconomics,game theory focuses on the strategic interactions between which of the following groups of agents?

Accepted Answer

A) individuals; firms 
B) individuals and firms; policy makers 
C) policy makers; economic forecasters 
D) individuals and firms; economic forecasters 
A) individuals; firms 
B) individuals and firms; policy makers 
C) policy makers; economic forecasters 
D) individuals and firms; economic forecasters

Question 18

In the United States,presidential elections occur every four years.If a political business cycle exists in the United States,in which year of a presidential term,all else fixed,would we expect output growth to be highest?

Accepted Answer

A) the first year 
B) the second year 
C) the third year 
D) the fourth year 
A) the first year 
B) the second year 
C) the third year 
D) the fourth year

Question 19

All of the macroeconometric models currently in use

Accepted Answer

A) originate in the United States. 
B) incorporate rational expectations into their predictions. 
C) originate with government or international agencies. 
D) originate with commercial firms who sell their forecasts to other firms and governments. 
E) none of the above 
A) originate in the United States. 
B) incorporate rational expectations into their predictions. 
C) originate with government or international agencies. 
D) originate with commercial firms who sell their forecasts to other firms and governments. 
E) none of the above

Question 20

Wars of attrition arise in which of the following contexts?

Accepted Answer

A) fiscal policy 
B) deficit reduction 
C) hyperinflation 
D) all of above 
E) A and B 
A) fiscal policy 
B) deficit reduction 
C) hyperinflation 
D) all of above 
E) A and B

Exam 22: Should Policy Makers Be Restrained

Once people believe the Fed's commitment to keep unemployment at the natural rate,the Fed can reduce unemployment below the natural rate

Republican administrations generally are relatively more concerned about which of the following?

Econometric models of the U.S.economy generally agree

Game theory analysis of macro policy suggests that as voters become more short-sighted

Which of the following statements is true about the United States over the past fifty years?

Which of the following was one of the main rules in the 1990 "Budget Enforcement Act"?

As uncertainty about the effects of policy on output decreases,we would expect that

Which of the following was one of the main rules in the 1990 "Budget Enforcement Act"?

The Masstricht treaty set the budget ratio to GDP to be ________ in order for countries to qualify to join the Euro area.

Assume that political business cycles do NOT exist.Given this assumption,we would expect,all else fixed,the output growth to be highest in which period?

The hostage taking example was developed by

Based on an analysis of macroeconomic outcomes under Republican and Democratic administrations,we would expect which of the following to occur?

Use "wars of attrition" to explain the debate about deficit reduction.

Analysis of U.S.growth rates shows that growth rate of output tends to be highest in which year of a presidential administration?

During republican presidential administration since 1948,economic growth was highest in ________ year of the administration?

For this question,assume that the there exists uncertainty about the impact of monetary policy on the macroeconomy.Given this information,it would be most appropriate for the central bank to increase money growth

In macroeconomics,game theory focuses on the strategic interactions between which of the following groups of agents?

In the United States,presidential elections occur every four years.If a political business cycle exists in the United States,in which year of a presidential term,all else fixed,would we expect output growth to be highest?

All of the macroeconometric models currently in use

Wars of attrition arise in which of the following contexts?

A Tour of the World

A Tour of the Book

The Goods Market

Financial Markets

Goods and Financial Marketsthe Is-Lm Model

The Labor Market

Putting All Markets Togetherthe As-Ad Model

The Phillips Curve,the Natural Rate of Unemployment,and Inflation

The Crisis

The Facts of Growth

Saving,capital Accumulation,and Output

Technological Progress and Growth

Technological Progress: the Short,the Medium,and the Long Run

Expectations: the Basic Tools

Financial Markets and Expectations

Expectations,consumption,and Investment

Expectations,output,and Policy

Openness in Goods and Financial Markets

The Goods Market in an Open Economy

Output,the Interest Rate,and the Exchange Rate

Exchange Rate Regimes

Fiscal Policy: a Summing up

Monetary Policy: a Summing up

Epilogue: the Story of Macroeconomics

an Introduction to National Income and Product Accounts

an Introduction to Econometrics

Filters