In the real business cycle model, business cycles are
a. efficient and do not represent lost output.
b. driven by technology shocks.
c. occur when markets clear.
d. all of the above.
e. None of the above
Question 2A simultaneous reduction in both taxes and the money stock will always
a. increase interest rates.
b. lower income and raise the interest rate.
c. lower income and raise the interest rate.
d. increase income.
e. raise income and raise the interest rate.
Question 3Aggregate income equals:
a. total profits.
b. aggregate output.
c. aggregate expenditure.
d. b and c.
e. all of the above.
Question 4What was the crucial factor permitting cotton textile production to take off in New England between 1790 and 1815?
(a) The imposition of high tariff rates
(b) A lowering of import tariffs by Britain
(c) The blocking of trade with England through the Embargo and
the War of 1812
(d) A relaxation of regulations restricting exports of machinery
by Britain
Question 5Most state governments in the United States operate under constitutional provisions that severely restrict expenditures financed by borrowing.
Suppose this were to change, so that state governments' access to credit markets was no different from the federal government. What consequences would you predict for the nation's aggregate debt burden?
Question 6Which of the following is not considered an ultimate target that the monetary authority attempts to control?
a. Growth in real GDP
b. The rate of unemployment
c. The rate of inflation
d. The money supply
Question 7The real business cycle theory is most closely related to
a. Keynesian theory.
b. monetarist theory.
c. the classical model.
d. the new Keynesian model.
Question 8Important sources of conflict in colonial America include conflicts between all of the following except
(a) Slaves and masters
(b) Native Americans and colonists
(c) Puritans, Roman Catholics, and Protestants
(d) Indentured servants and masters
Question 9Which of the following was NOT a part of the American system of manufacturing?
(a) Interchangeable and standardized parts
(b) Use of indentured servants
(c) Mass production
(d) High capital intensities of production
Question 10Suppose that Firestone Tires buys raw rubber for 5,000 and then uses this to make tires it sells for 20,000 . As a result, GDP has risen by:
a. 20,000
b. 5,000
c. 15,000
d. 25,000
Quick Reply
