Unlike business, government can coerce individuals to paying higher prices through taxes.
Indicate whether the statement is true or false
Question 2The perceived specie shortage led colonists to invent:
(a) Country money
(b) Paper money
(c) Inflationary dollars
(d) Conservative money
Question 3Keynesians and monetarists share the belief that
a. recessions are caused by falls in aggregate demand.
b. the demand for money is stable.
c. excess demand is a chronic problem in modern economies.
d. the Federal Reserve is responsible for most recessions.
e. stabilization policy is beneficial.
Question 4A government runs a deficit when its government revenues exceed expenditures.
Indicate whether the statement is true or false
Question 5Goldin (2001) refers to the 20th century as the human capital century and credits education for the rise in overall income.
Indicate whether the statement is true or false
Question 6The classical theory of aggregate supply where markets are perfectly flexible
a. may or may not be compatible with the Keynesian system.
b. is easily added the IS-LM framework of aggregate demand.
c. is fundamentally incompatible with the Keynesian system.
d. is consistent with the IS-LM framework if all shocks are to the IS curve.
e. none of the above.
Question 7Which of the following models do not believe that there exists a short run tradeoff between higher inflation and lower unemployment?
a. Keynesians
b. monetarists
c. new classical
d. real business cycle
e. none of the above
Question 8The difference between the Keynesian and classical labor supply functions is that in the Keynesian version
a. workers know the real wage while in the classical system workers must form an expectation of the price level.
b. workers must form an expectation of the price level while the workers know the real wage in the classical system.
c. workers are assumed to be interested in the money wage while in the classical version workers know the real wage.
d. labor supply depends on the actual real wage while labor supply depends on the expected real wage in the classical system.
Question 9All of the following methods were used to raise funds to finance the Civil War (18611865) except
(a) An income tax
(b) The printing of paper money
(c) Taxes on prostitution
(d) Taxes on whiskey and beer
Question 10If an increase in marginal tax rates leads to an increase in tax revenues, then
a. the Laffer curve model of tax revenue is refuted.
b. supply-side economics is refuted.
c. the economy could be below the tax revenue maximizing tax rate.
d. we could be on the upward sloping portion of the Laffer curve.
Question 11When the English pound appreciated against a colonial currency, this signaled
(a) that colonists needed more colonial currency to buy an English pound.
(b) that colonists needed less colonial currency to buy an English pound.
(c) that colonists needed more colonial and Spanish currency to buy an
English pound.
(d) nothing of economic importance.
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