question
If the real interest rate declines by 1 percent and the inflation rate increases by 2 percent, the nominal interest rate must:
answer
increase by 1 percent
question
Real money balances equal the:
answer
amount of money expressed in terms of the quantity of goods and services it can purchase.
question
In the case of an unanticipated inflation:
answer
creditors with an unindexed contract are hurt because they get less than they expected in real terms
question
If wage rigidity holds the real wage above the equilibrium level, an increase in the supply of labor will ______ the number unemployed:
answer
increase
question
The unemployment resulting when the real wages are held above equilibrium is called _______ unemployment, while the unemployment that occurs as workers search for a job that best suits their skills is called _______ unemployment:
answer
structural and frictional
question
The general demand function for real balances depends on the level of income and the:
answer
nominal interest rate
question
If the number of employed workers equals 200 million and the number of unemployed workers equals 20 million, the unemployment rate equals ________ percent:
answer
9
question
Analysis of population growth around the world concludes that countries with high population growth tend to:
answer
have a lower level of income per worker than other parts of the world
question
The fact that the Soviet Unions input was the same as the U.S. but produced only 1/3 of the U.S. GDP highlights the importance of which factor of growth:
answer
Efficiency
question
When a person purchases a 90-day Treasury bill, he or she cannot know the:
answer
ex post real interest rate
question
What are the three main reasons why some countries are poorer than others:
answer
low saving and human capital, slow technological progress, and low efficiency
question
In the solow growth model, if investment exceeds depreciation, the capital stock will _____ and output will _____ until the steady state is attained:
answer
increase, increase
question
If the capital stock equals 200 units in year 1 and the depreciation rate is 5 percent per year, the in year 2, assuming no new or replacement investment, the capital stock would equal ____ units:
answer
190
question
In the solow growth model with no population growth and no technological progress, the higher the steady capital-per-worker ratio, the higher the steady state:
answer
level of output per worker
question
Empirical evidence supports the theory that free trade:
answer
increases economic growth
question
The balanced growth property of the solow growth model with population growth and technological progress predicts which of the following sets of variables will grow at the same rate in the steady state? :
answer
Output per worker, capital per worker, real wage
question
If the fraction of employed workers who lose their jobs each month (the rate of job seperations) is 0.01 and the fraction of the unemployed who find a job each month is 0.09 ( the rate of job findings ), then the natural rate of unemployment is:
answer
10 percent
question
Among the four countries- the United States, the United Kingdom, Germany, and Japan- the one that experienced the most rapid growth rate of output per person between 1948 and 1972 was:
answer
Japan
question
Discouraged workers are individuals who:
answer
want a job but have given up looking for one
question
Short-term unemployment is most likely to be ____ unemployment, while long-term unemployment is most likely to be______ unemployment:
answer
frictional, structural
question
Two economies are identical except that the level of capital per worker is higher in highland than in lowland. The production functions in both economies exhibit diminishing marginal product of capital. An extra unit of capital per worker increases output per worker:
answer
more in Lowland
question
All of the following are causes of structural unemployment except:
answer
unemployment insurance
question
Which of the following is not a proposed explanation for that fact that Americans on average work 20 percent more hours than the typical resident of western Europe:
answer
The underground economy is larger in American than in Europe
question
If the real return on government bonds in 3 percent and the expected rate of inflation is 4 percent, then the cost of holding money is ______ percent:
answer
7
question
In the solow growth model with population growth, but no technological change, a higher level of steady-state output per worker can be obtained by all of the following except:
answer
increasing the population growth rate
question
In the steady state with no population growth or technological change, the capital stock does not change because investment equals:
answer
depreciation
question
According to the Institutions theory of economic growth, which of the following is essential for a countrys economic development:
answer
a fair legal system which protects property rights
question
Other things being equal, all of the following government policies are likely to increase national savings except:
answer
running a budget deficit
question
If there are 100 transactions in a year and the average value of each transaction is $10, then if there is $200 of money in the economy, transactions velocity is ______ times per year:
answer
5
question
Heather loses her teaching job at Vestal Middle School because the local governments must cut spending during a recession. What type of unemployment is it:
answer
cyclical
question
Seigniorage
answer
Revenue that government raises by printing money.
question
Menu costs
answer
The cost of changing prices, such as printing a new menu.
question
Monetary Neutrality
answer
In the Long run, changing the money supply does not affect any real variables. only affects nominal variables.
question
Fisher Equation
answer
Nominal Interest = Real interest rate + inflation
question
Shoeleather costs
answer
A metaphor for the cost and inconvenience of trying to reduce money holding.
question
Classical Dichotomy
answer
In the Long run, the determination of real variables does not involve any nominal variables.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
