In the neoclassical growth model without technological progress, the steady-state growth rate of per capita output is
a. the growth of technology plus the growth of population.
b. the growth of population.
c. the growth of technology.
d. the growth of technology plus population plus depreciation.
Question 2Monetarist and Keynesian theories of money demand differs in that
a. Monetarists assumes that the demand for money is highly inelastic while Keynes assumes money demand is elastic.
b. Monetarists assumes that the money demand function is highly stable while Keynes assumes it is unstable.
c. Monetarists assumes that there is only a transactions demand for money while Keynes also considers the precautionary and speculative demands for money.
d. Monetarists assume that the proportion of income held in theform of money is constant while Keynes believes it varies.
e. all of the above.
Question 3The need for government subsidies of irrigation produced
(a) the Desert Land Act (1877).
(b) the Interstate Commerce Commission Act (1887).
(c) the Newlands Act (1902).
(d) all of the above.
Question 4Unemployment in 1939, after a decade of recession and depression, still exceeded 10 percent.
Indicate whether the statement is true or false
Question 5According to historian Charles Beard's analysis and interpretation, the Constitution was
(a) divinely inspired.
(b) strongly favored by the vast majority of the colonists.
(c) influenced by the economic self-interest of the delegates to the Constitutional Convention.
(d) of little importance to future economic growth.
Question 6A monetarists would expect an increase in government spending to have a strong effect on output only if the spending increase was
a. financed by an increase in the money supply.
b. financed by a sale of bonds.
c. financed by an increase in taxes.
d. accompanied by a higher in the deficit.
Question 7In a steady-state, sustained increases in the capital-to-labor ratio are only possible if
a. the savings rate increases.
b. population growth decreases.
c. depreciation decreases.
d. technology increases.
e. all of the above.
Question 8If a country imposes a tariff on all imports, then you would expect to see:
a. an increase in this country's current account surplus.
d. an increase in this country's foreign lending.
c. in increase in this country's exchange rate.
d. a and b.
e. all of the above.
Question 9Classical economists argue that all workers could have been employed during the Great Depression if they had been willing to accept falling wages.
But President Hoover and his supporters recommended that hours be cut before wages which increased unemployment. Indicate whether the statement is true or false
Question 10Extensive agricultural cultivation from 1870 to 1910, as described by Hughes and Cain (2011), meant that
(a) there could be no increase in agricultural output per man hour.
(b) the percentage increase in acreage under cultivation and the percentage increase
in agricultural output was roughly the same.
(c) the proportion of the labor force in agriculture steadily increased.
(d) all of the above were true.
Question 11Burns (1934) argued that retardation and decline in some industries are
(a) healthy for a growing and developing economy because resources are released for use in productive sectors.
(b) healthy only for the competitors of the declining industries.
(c) unhealthy for a growing economy because resources are idle in the declining industries.
(d) unhealthy for a growing economy because the released resources are used unproductively
by the competitors of the declining industries.
Question 12The last of the public land was sold between 1881 and 1907.
Indicate whether the statement is true or false
Question 13In the neoclassical growth model, break-even investment must cover
a. the depreciation in capital.
b. the rate of technology growth.
c. depreciation and capital for new workers (population growth).
d. capital for new workers (population growth) and technology growth.
e. none of the above.
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