If productivity growth equals 3.0 percent, the contribution from capital growth 1.2 percent and the contribution from labor growth 2.0 percent, then output growth must equal ________.
A) 2.2 percent
B) 4.2 percent
C) 6.2 percent
D) 7.2 percent
Question 2According to the quantity theory, inflation is ultimately controlled by
a. private firms who set prices.
b. the monetary authorities who control the money supply.
c. those who control output.
d. the price of oil.
Question 3Imports into the U.S. increased when
(a) deflation in the U.S. occurred.
(b) real wages and incomes rose in the U.S.
(c) the International Trade Commission was established.
(d) all of the above occurred.
Question 4What is the relationship between debt intolerance and the inflation tax?
What will be an ideal response?
Question 5If the level of government spending rises and simultaneously there is a fall in the money stock, we definitely know that
a. income will rise.
b. the change in the interest rate will be ambiguous.
c. income will fall.
d. the interest rate will fall.
e. None of the above
Question 6Which of the following is correct? A general assumption in real business cycle models is that
a. dissimilar individuals populate the economy.
b. the labor market does not clear.
c. the economy is populated by a group of identical individuals.
d. the economy experiences involuntary unemployment.
Question 7According to the classical system, saving is a function of
a. income.
b. the real interest rate.
c. the real wage.
d. the profitability of firms.
e. all of the above.
Question 8Productivity is ________.
A) determined by central bank policy
B) the combined effect of monetary and fiscal policy
C) the residual component of the production function
D) driven by changes in the rate of growth of output
Question 9After World War II (194145), the U.S. public debt
(a) remained unchanged in 1947 even though the government ran a budget
surplus (government expenditures fell below revenues in 1947).
(b) continued to rise even though the government ran a budget surplus at times.
(c) decreased even though the government ran a budget surplus continuously.
(d) remained high while the government continuously ran deficits.
Question 10The Second Bank of the United States lost its charter, in part, because Andrew Jackson effectively argued to the voting members of Congress that the central bank was a monopoly and largely influenced by the corrupt and fraudulent behavior of a
wealthy minority and foreign investors. Indicate whether the statement is true or false
Question 11The colonial region with the smallest deficit with the United Kingdom between 17681772 was
(a) New England
(b) the Middle Colonies
(c) the Southern Colonies
(d) the New England and Middle Colonies
Question 12According to the modern Keynesian view,
a. both the IS and the LM curve slopes are in the intermediate or normal range, where both monetary and fiscal policies are effective in controlling income.
b. only the IS curve slope is in the intermediate or normal range and, therefore, only fiscal policy is effective in controlling income.
c. only the LM curve slope is in the intermediate or normal range and, therefore, only monetary policy is effective in controlling income.
d. neither the IS nor the LM curve slopes are in the intermediate or normal range and, therefore, neither monetary nor fiscal policies are effective in controlling income.
Question 13A measure of seignorage, in real terms, is ________.
A)
B) B + M
C) r
D) Y - T - C
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