Exam 1: The Policy and Practice of Macroeconomics

A simple macroeconomic model might explain how an increase in the demand for new housing would lead to a decrease in the rate of unemployment.In such a model,which of these variables is likely to be exogenous?

Consider an economic policy regime in which rules are well-known but frequently ignored.Which of these statements is true?

The term "business cycle" refers to ________.

Looking at the U.S.personal saving rate over the last sixty years,we can say that ________.

From 1900 to 2013 real GDP per person in the U.S.has ________.

Raising taxes and cutting spending are examples of ________.

A good example of a policy to increase an economy's saving rate is ________.

Activists believe ________.

Nonactivists propose doing nothing in the face of economic hardship because ________.

An exogenous variable is typically ________.

An increase in interest rates might be an example of a ________ policy for the purpose of ________.

The old adage "rules are made to be broken" would typically be associated with economists who might advocate ________.

In a model of the saving rate,which of these relationships is most crucial?

To compare the conclusions of a model with what actually happens,historical data are entered into the model as ________.

Apart from the Great Depression of the 1930s,which decade saw the largest rise in unemployment in the U.S.?

Which of the following sequences best describes the five necessary steps to develop an economic model in the correct order?

All governments face a budget constraint: none can spend more than the sum of current government revenues plus the amount that creditors are willing to lend.Why,then,do government budget deficits matter?

In the Great Depression of the 1930s,the unemployment rate in the U.S.climbed to what percentage?

Fiscal policy involves ________.

Figure 1.1 -Figure 1.1 displays exogenous variables entering a model from which emerge endogenous variables.Yet,in the five-step process to develop an economic model,the macroeconomist specifies the endogenous variables first,then the exogenous variables.Which is the correct sequence? Explain.