What was the World Bank designed to do?
(a) Serve as a long-term lender
(b) Serve as a short-term lender
(c) Make both short and long-term loans
(d) Make grants-in-aid, but not to be a lending institution
Question 2The Keynesian labor supply function is shown as
a. Ns = g(W/P).
b. Ns = g(P/W).
c. Ns = t(W/Pe).
d. Ns = t(Pe/W).
Question 3The roots of the Civil War (18611865) can be traced to the colonial period of U.S. history. The ratification of the 10th amendment of the U.S. Constitution brings all issues connected to the Civil War to an end.
Indicate whether the statement is true or false
Question 4According to Keynesian theory, the profit-maximizing firm demands labor up to the point at which
a. the real wage is equal to the marginal productivity of labor.
b. the money wage paid to labor is just equal to the money value of the marginal product of labor.
c. labor and capital costs are equal.
d. a and/or b are correct.
Question 5Unlike previous and future wars, the United States' federal government did not need to impose an income tax to finance the Civil War (18611865).
Indicate whether the statement is true or false
Question 6If government spending and tax collections both increase by the same amount, then according to the classical loanable funds market:
a. the demand for loanable funds will increase and the interest rate will rise.
b. the demand for loanable funds will fall and the interest rate will rise.
c. savings will rise and interest rates will fall.
d. nothing will shift and the interest rate will remain constant.
e. none of the above.
Question 7By the 1840s,
(a) labor had achieved political power in the franchise, i.e., the right to vote.
(b) unions per se were not considered by law to be conspiracies and therefore illegal.
(c) peaceful picketing of businesses during strikes was considered to be legal.
(d) all of the above were true.
Question 8Perfect flexible prices are a critical assumption in the
a. classical model.
b. Keynesian model.
c. monetarist model.
d. new Keynesian model.
e. both a and c.
Question 9Colonialists tried to attract precious metals and coins by raising or attempting to raise the colonial price of the foreign money. This is called devaluation.
Indicate whether the statement is true or false
Question 10According to the Keynesians, labor contracts
a. are unimportant for modern labor markets because few worker are unionized.
b. mean that real wages are inflexible.
c. mean that money wages never adjust.
d. imply that nominal wages adjust, but only periodically.
Question 11The International Monetary Fund, one of the Bretton Woods Institutions,
(a) was meant to provide short-term credit.
(b) was meant to provide long-term credit.
(c) was meant to provide both short- and long-term credit.
(d) was not meant to provide credit.
Question 12According to the Cambridge approach to the quantity theory, people hold money:
a. to store their wealth.
b. to make transactions.
c. as a substitute for consumption.
d. only when they have to.
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