Tobin's q is equal to ________.

Tobin's q is equal to ________.
 
  A) the market value of a firm times the replacement cost of installed capital
  B) the market value of a firm plus the replacement cost of installed capital
  C) the market value of a firm divided by the replacement cost of installed capital
  D) the market value of a firm minus the replacement cost of installed capital

Question 2

What immediate consequence does an increase in education time have in the endogenous growth model with human capital?
 
  A) lower output
  B) lower output in the future
  C) lower wages
  D) lower human capital

Question 3

Under purely flexible exchange rates,
 
  A) there is no intervention by the domestic fiscal or monetary authorities to specifically target the nominal exchange rate.
  B) there is only occasional intervention by the domestic fiscal or monetary authorities to specifically target the nominal exchange rate.
  C) the domestic fiscal and monetary authorities retain considerable flexibility to prevent short-run variability in the nominal exchange rate.
  D) the domestic fiscal and monetary authorities retain considerable flexibility to prevent long-run variability in the nominal exchange rate.

Question 4

Negative correlation between x and y implies that
 
  A) when x is high, y is high.
  B) when x is high, y is low.
  C) xy < 0.
  D) x/y < 0.

Question 5

If there is a decline in world autonomous consumption ________.
 
  A) the domestic real interest rate would fall
  B) domestic investment would rise
  C) net exports would fall
  D) all of the above
  E) none of the above

Question 6

The collapse of Enron Corporation is a reminder of the importance of ________.
 
  A) moral hazard
  B) government-directed credit
  C) energy trading
  D) transparency

Question 7

An improvement in school quality translates into an increase in which model parameter?
 
  A) H
  B) z
  C) b
  D) 1-u

Question 8

Four reasons for firms to hold inventories are given in the text. For each reason, indicate briefly whether and how it helps to explain the high volatility of inventory investment.
 
  What will be an ideal response?

Question 9

The U.S. Securities and Exchange Commission ________.
 
  A) oversees lending policies at commercial banks
  B) directs credit to underserved segments of the financial sector
  C) promotes transparency in direct finance transactions
  D) advises households and businesses on the best companies in which to invest

Question 10

When a macroeconomic aggregate is procyclical
 
  A) it grows faster than GDP.
  B) its deviations from trend generally change before the deviations from trend in GDP do.
  C) its deviations from trend generally change more that the deviations from trend in GDP.
  D) its deviations from trend are more often of the same sign as the deviations from trend in GDP.

Question 11

Purchasing power parity may not hold in practice due to all of the following except
 
  A) transportation costs.
  B) cross-country differences in environmental regulations.
  C) trade barriers like tariffs and quotas.
  D) the existence of non-traded goods.