A contractionary policy can be thought of as:

A contractionary policy can be thought of as:
 a. a decrease in the money supply
  b. an increase in the money supply
  c. an increase in the interest rate.
 d. either (a) or (c).

Question 2

Labor productivity is measured as:
 a. the share of wages in national income.
  b. the change in labor to capital ratio.
  c. real output per labor hour.
  d. the change in output from hiring an additional unit of labor.
  e. the growth in the quantity of labor.

Question 3

A given increase in demand will raise the equilibrium quantity exchanged:
 a. unless supply is perfectly inelastic.
 b. more in the long run than in the short run.
  c. in the market for normal goods.
 d. all of the above

Question 4

The Fed would engage in ____ it wanted to address an inflationary gap.
 a. expansionary monetary policy
  b. contractionary monetary policy
  c. contractionary fiscal policy
 d. expansionary fiscal policy

Question 5

Which of the following factors will increase labor productivity in the United States?
 a. An aging labor force
  b. A decline in the number of women entering the workforce
  c. An increase in unskilled workers
  d. An increase in the average level of education
  e. A decrease in the number of educated immigrants

Question 6

For a given decrease in demand, the effect on price is smallest and the effect on quantity exchanged largest when:
 a. supply is perfectly elastic.
 b. supply is elastic.
 c. supply is unit elastic.
 d. supply is perfectly inelastic.

Question 7

An expansionary monetary policy is likely to increase real output more than just temporarily:
 a. when actual output currently is beyond the economy's long-run capacity.
  b. when the economy currently is at full employment.
 c. when the economy currently operates at less than capacity.
 d. at virtually any output level.

Question 8

By the late 1990s, the growth rate of total factor productivity in the United States _____.
 a. averaged about 1
  b. averaged between 3 and 4
  c. averaged between 6 and 8
  d. averaged between 10 and 15
  e. averaged above 20

Question 9

For a given decrease in demand, the effect on price is largest and the effect on quantity exchanged smallest when:
 a. supply is perfectly elastic.
 b. supply is elastic.
 c. supply is unit elastic.
 d. supply is perfectly inelastic.

Question 10

If the Fed sells bonds, the short run impact of this policy will tend to include:
 a. an increase in the inflation rate.
  b. a reduction in unemployment.
 c. an increase in real output.
 d. an increase in real interest rates.

Question 11

Suppose in an economy the total factor productivity grows by 5. Annual growth in labor and capital stock equal 2.5 and 1.5 respectively. If the labor force receives 75 of the real GDP, calculate the annual growth in the real GDP of the economy.
 a. 10.5
  b. 7.25
  c. 5.50
  d. 4.76
  e. 0.05

Question 12

Assume the price of widgets increases by 22 percent and the quantity supplied increases by 27 percent as a result. The elasticity of supply coefficient is:
 a. greater than 1, implying that widgets are normal goods.
  b. less than 1, implying that widgets are inferior goods.
  c. greater than 1, implying that supply is elastic.
 d. greater than 1, implying that supply is inelastic.

Question 13

When the economy is initially at full employment:
 a. expansionary monetary policy will tend to increase the price level in the short run and the long run.
  b. expansionary monetary policy will tend to increase the price level in the short run but not the long run.
  c. expansionary monetary policy will tend to increase the price level in the long run but not the short runq
  d. expansionary monetary policy will not tend to increase the price level in the short run or the long run.