D. all of the above.

71. Hysteresis is the effect of history on
D. the natural rate of unemployment.

72. Hyperinflation usually starts when
C. governments are forced to print money to finance their spending.

73. In the basic endogenous growth model, the production function exhibits
B. constant returns.

74. In the basic endogenous growth model, usually called the Y=AK model, as long as the savings rate times the constant A is greater the rate of depreciation, income will grow
D. forever.

75. In the Solow model, savings leads to _______ growth, but in the Y=AK model, savings can lead to _______ growth.
B. temporary; persistent

76. In the two sector model presented in Section 8-4, where the sectors consist of manufacturing firms and research universities,
A. only firms use capital as inputs.

77. In the two sector model, the proportion of labor devoted to research universities determines the
D. steady-state growth rate of income.

78. In most endogenous growth theories, externalities from firms' research play a crucial role. Economists

agree that research
B. can exhibit externalities of ambiguous value.

79. If a firm with a constant returns to scale production function pays all factors their marginal products, then
B. economic profit is zero and accounting profit is positive.

80. If an individual is to hold lower money balances on average, she must make more frequent trips to the bank to withdraw money. This inconvenience of reducing money holding is called
B. a shoeleather cost.

81. In the Solow model with technological progress, an increase in the rate of technological change will
C. leave the investment curve unchanged.

82. In a Solow model with population growth and technological progress, the steady state level of consumption is maximized when the steady state marginal product of capital equals the rate of depreciation plus
A. the rate of population growth plus the rate of technological change.

83. In the Solow growth model with population growth (n) and technological progress (g), the steady-state growth rate of output per efficiency unit is
A. 0.

84. In the Solow growth model with population growth (n) and technological progress (g), the steady-state growth rate of output per worker is
C. g.

85. In the Solow growth model with population growth (n) and technological Progress (g), the steady-state growth rate of total output is
D. n + g.

86. If two economies are identical except for their rates of population growth, then the economy with the higher rate of population growth will have
D. lower steady-state output per worker.

87. If two economies are identical except for their rates of population growth, then if both economies are in steady state, the economy with the higher rate of population growth will have a
B. higher rate of growth of total output.

88. If the population growth rate decreases in an economy described by the Solow growth model, the line representing population growth and depreciation will
B. shift downward.

89. In the Solow growth model with population growth, the Golden Rule steady state is achieved when the marginal product of capital equals
C. the population growth rate plus the rate of depreciation.

90. If a production function has two inputs and exhibits constant returns to scale, then doubling both inputs will cause the output to
C. double.

91. In a closed economy, with total output and taxes fixed, if government spending rises
D. investment falls.

92 In a closed economy with total income fixed, a reduction in taxes will cause consumption
A. to rise and investment to fall.

93. In the sticky-wage model, output deviates from the natural rate through
C. unexpected changes in the price level.

94. In the sticky-wage model, employment is assumed to be determined by the
C. demand for labor.

95. In the imperfect-information model, it is assumed that firms
B. can observe the price of their output but cannot observe the overall price level.

96. In the sticky-price model, if the fraction of firms in the economy that set prices in advance rises, then it would be expected that the aggregate supply curve
D. becomes flatter.

97. If expected inflation rises, the Phillips curve
A. shifts upward.

98. In the country of Stabilia, the monetary authorities particularly dislike inflation. The current inflation of 5 percent is considered rampant. If the sacrifice ratio in Stabilia is five, the percentage of a year's GDP that has to be forgone to bring inflation down to 1 percent is
C. 20 percent.

99. In a closed economy with output fixed, an increase in government spending matched by an equal increase in taxes will
B. increase the interest rate.

100. In a closed economy with fixed output, an increase in government spending without any change in taxes will lead to a(n)
D. increase in the real interest rate and no change in private saving.

101. In the simple macroeconomic model of Chapter 3, a decrease in taxes will shift the
C. savings curve to the left.

102. If the Fed reduces the supply of money, the
D. AD curve shifts inward.

103. In the short run, if prices are fixed, the aggregate supply curve is
C. horizontal.

104. In the full model of the economy presented in chapter 3, the variable that adjusts to equilibrate the supply and demand for goods and services is
D. the real interest rate.

105. If the nominal exchange rate is $1 equals 150 Japanese yen, and a Big Mac costs $2 in the U.S. and 300 yen in Japan, then the real exchange rate of U.S. Big Macs for Japanese Big Macs is
A. 1.

106. If investment becomes less sensitive to the interest rate, then the
C. IS curve becomes steeper.

107. If the marginal propensity to consume is large, then the
D. IS curve is relatively flat.

108. In the early 1980's the Federal Reserve, under Paul Volcker, began a period of tight money aimed at reducing inflation. Under this policy, nominal interest rates were:
B. higher in the short run and lower in the long run.

109. In the quantity theory interpretation of the LM curve, the LM curve slopes up because
B. velocity depends on the interest rate.

110. If the central bank increased the supply of real money balances, then the LM curve would
D. shift outward.

111. If money demand became more sensitive to the level of income, the LM curve would
A. become steeper.

112. In the Keynesian cross model of Chapter 10, if the interest rate is constant and the MPC is 0.7, then the government purchases multiplier is
D. 3.3.

113. In the Keynesian cross model of Chapter 10, if the interest rate is constant, the MPC is 0.6, and taxes are increased by $100, by how much does income change?
B. It decreases by $150.

114. In "The General Theory of Employment, Interest, and Money," John Maynard Keynes proposed that the Great Depression was caused by
B. low aggregate demand.

115 If a country's real exchange rate falls (depreciates), then
A. net exports rise.

116In the model of Chapter 5, if the government prevented the import of foreign cars, then, in the resulting equilibrium, net exports would
B. remain constant because saving and investment would not change.

117. If the capital stock is above the steady-state level, then investment
A. is smaller than depreciation.

118. If an economy is initially in a steady state and it experiences an increase in its saving rate, then the steady-state capital stock will
C. rise.

119. In the Solow model, the depreciation rate represents the
D. fraction of the capital stock that wears out each year.

120 If the United States has an inflation rate of 10 percent, Great Britain has an inflation rate of 12 percent, and the United States dollar has a nominal appreciation against the British pound of 3 percent, then the real appreciation of the United States dollar against the British pound is
A. 1 percent..

121. If the supplies of capital and labor are fixed and technology is unchanging, then real output is
A. fixed.

122. If a production function has the property of diminishing marginal product, then doubling
D. one of the inputs will reduce its marginal product.

123. If the rate of unemployment is neither rising nor falling, then the number of people finding jobs must equal the number of people
B. losing or leaving jobs.

124. If the rate of job finding rises, the natural rate of unemployment will
C. decrease.

125. In which case is total expenditure in an economy not equal to total income?

Date: 2015-12-11; view: 1205