From Elizabeth I to George III, England strongly influenced the institutional structure of colonial America. This influence is realized today on which of the following fronts?
(a) Private property rights
(b) The role of international trade and finance in the U.S. economy
(c) Population growth through immigration
(d) All of the above
Question 2At the time of the American Revolution, the Industrial Revolution first launched in
(a) France.
(b) Germany.
(c) England.
(d) Spain.
Question 3Which of the following shocks have been emphasized most often with respect to real business cycle theory?
a. Shocks to technology
b. Variations in environmental conditions
c. Changes in the real (relative) prices of imported raw materials
d. Changes in tax rates
e. None of the above
Question 4Assume that there is an increase in perceived bankruptcy risk. As a result of this we would expect to see
a. income and interest rates to rise.
b. money demand and interest rates to fall.
c. money demand and interest rates to rise.
d. money supply to rise and interest rates to fall.Figure 7-1
Question 5Contrast the Cambridge and Fisher versions of the quantity theory. Explain why the Cambridge version of the quantity theory represents a more modern monetary theory when compared to Fisher's version.
What will be an ideal response?
Question 6What is the relationship between fiscal multipliers and the zero lower bound?
A) Fiscal multipliers cannot fall below zero.
B) When monetary policy has hit the zero lower bound, fiscal multipliers are likely to be larger than normal.
C) At the zero lower bound, a fiscal contraction is actually expansionary.
D) At the zero lower bound, fiscal policy works by shifting the aggregate supply curve, rather than shifting the aggregate demand curve.
Question 7Between 1866 and 1914, statistical evidence suggests that many big businesses depended heavily on U.S. protectionist policies.
Indicate whether the statement is true or false
Question 8Which of the following statements is (are) correct? According to real business cycle theory,
a. the desirable monetary policy would appear to be one that results in a slow steady growth in the money supply and, thus, stable prices.
b. there is some role for activist monetary stabilization policy of a Keynesian type.
c. changes in aggregate demand cannot impact output.
d. Both a and b
e. Both a and c
Question 9Developments which marked the beginning of the modern period of Western Europe around the year 1500 did not include which of the following?
(a) The rise of nation states and decline in power of the feudal nobility
(b) The Protestant Reformation
(c) Creation of national markets, commercial growth and exploration abroad
(d) The rise of Islam to centralized power in North America
Question 10Other things the same, in the Solow model in the steady state, a higher rate of population growth ________ growth rate of output.
A) leads to a higher
B) leads to a lower
C) has no long-run effect on the
D) has an ambiguous effect on the
Question 11What is the difference between savings and investment?
What will be an ideal response?
Quick Reply
