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B. Italian GNP will fall; U.S. GNP will rise.C. Italian GDP will fall; U.S. GDP will rise. D. Italian GNP will fall; U.S. GDP will rise.
5. Suppose that the capital stock is 100, the depreciation rate is 10 percent per year, and output is 25. What must the saving rate be to keep the capital stock constant? 3. Suppose that the index of leading indicators leads the business cycle by twelve months. If the inside lag of monetary policy is three months, then the maximum outside lag that makes monetary policy effective is
8. Suppose you are president and your advisors
10. Suppose that the government has been conducting policy according to the following equation for some time now Money Growth = 3% + (Unemployment Rate - 6%) This kind of policy is called a(n)
12. Suppose that a professor announces that an exam will be given in one particular week. When the date for the exam comes, the professor is tempted not to give the exam, reasoning that the students have already studied and now she can teach an extra day. This is an example of
14. Suppose that an economy is in steady state and has more capital than it would have in the Golden Rule steady state. A policymaker would want to pursue policies aimed at decreasing
18. Suppose that the production function is Y = AF(K,L). The (unchanging) share of capital in output is 0.5. Suppose that output increases by 4 percent, the labor force increases by 3 percent, and the capital stock increases by 2 percent. What is the Solow residual in this case?
21. Suppose that the production function is y = sqrt(k) [that is, output per worker is equal to the square root of capital per worker], s = 0.20, and delta [the depreciation rate] = 0.10. What is the Golden Rule level of capital per capita?
2. Suppose that the price level is 1 and output is 100. Then the Fed suddenly increases the money supply by 10 percent. According to the AD/AS model, what would be the most probable paths for output and prices?
17. Suppose country A has a higher risk premium than country B. One can then infer that country A
11. Suppose the United States were a small open economy under floating exchange rates. If the U.S. government imposes a quota on German cars in an effort to reduce the trade deficit, then
6. Suppose that the Mundell-Fleming model is depicted in a Y - e graph. The equilibrium would then occur at the point where the
18. Suppose that the typical consumer buys one apple and one orange every month. In the base year 1986, the price for each was $1. In 1996, the price of apples rises to $2, and the price of oranges remains at $1. Assuming that the CPI for 1986 is equal to 1, the CPI for 1996 would be equal to A. 1/2. B. 1. C. 3/2. D. 2.
1. The model of aggregate supply and aggregate demand in the short run differs from our long-run model of the economy because, in the short run
3. The model of aggregate supply and aggregate demand that assumes sticky prices
4. The assumption of sticky prices is NOT valid for the case of the
2. The positive relationship between the price level and the amount of output means that the aggregate supply curve is
6. The sticky wage model predicts that
11. The Phillips curve represents the trade-off between
12. The modern Phillips curve posits that the inflation rate depends on three forces. On which of the following does it NOT depend?
14. The inflation that tends to occur when unemployment is below the natural rate is called
15. The inflation caused by supply shocks is called 17. The approach that assumes that people optimally use all the available information to forecast the future is called
18. The idea that, in the long run, the economy returns to the levels of output and unemployment described by the classical model is called
10. The slowdown in the U.S. economy in 2001 can be explained by
4. The IS-LM model predicts that an increase in the price level will
18. The "spending hypothesis" explaining the Great Depression stipulates that the main cause of the Great Depression was a decline in spending. Which of the following does not support this hypothesis?
19. The Pigou effect stipulates
17. The "money hypothesis" explaining the Great Depression stipulates that the Depression was caused by a contractionary shift in the LM curve. Which of the following facts supports this hypothesis?
1. The returns to scale in the production function Y = K0.5 L0.5are 22. The real interest rate is equal to the nominal interest rate minus The world interest rate is 5 percent. What are net exports of Transalpinia?
14. To obtain the net domestic product (NDP), start with GDP and subtract A. depreciation. B. depreciation and indirect business taxes. C. depreciation, indirect business taxes, and corporate profits. D. depreciation, indirect business taxes, corporate profits, and social insurance contributions.
15 The price of one currency in terms of another currency, such as 150 yen for $1, is an example of 15. To obtain national income, start with GDP and subtract A. depreciation. Date: 2015-12-11; view: 1268
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