If the market value of a firm is 6 billion and Tobin's q is equal to 2, then the replacement cost of installed capital must be ________.
A) 2 billion
B) 3 billion
C) 9 billion
D) 18 billion
Question 2Credibility is important to successful anti-inflationary policy in ________.
A) new Keynesian theory
B) traditional Keynesian theory
C) real business cycle theory
D) post classical theory
Question 3Prudential supervision is, in essence, the monitoring of ________.
A) borrowers, to enforce restrictive covenants
B) intermediaries, to direct credit to preferred sectors of the economy
C) holders of an insurance policy, to discourage excessively risky behaviors
D) depositors, to discourage sudden withdrawal of funds
Question 4Endogenous growth theory is about
A) welfare of indigenous people.
B) explaining growth.
C) studying education.
D) studying fertility choices.
Question 5If the correlation between GDP and y is -0.75, we say y is
A) procyclical.
B) acyclical.
C) countercyclical.
D) tricyclical.
Question 6Which of the following would lead domestic investment to rise?
A) an increase in government spending throughout the world
B) an increase in world taxes
C) an increase in world autonomous consumption
D) all of the above
E) none of the above
Question 7A devaluation of the exchange rate is a policy action that
A) increases the real exchange rate.
B) decreases the real exchange rate.
C) increases the nominal exchange rate.
D) decreases the nominal exchange rate.
Question 8Discretionary economic policy is not beneficial in the ________.
A) traditional Keynesian theory
B) new Keynesian theory
C) Luka Brazzi model
D) real business cycle theory
Question 9If the correlation between GDP and y is 0.55, we say y is
A) procyclical.
B) acyclical.
C) countercyclical.
D) tricyclical.
Question 10Which of the following is a way to obtain endogenous growth:
A) inflation.
B) human capital accumulation.
C) physical capital accumulation.
D) population growth.
Question 11If the market value of a firm is 6 billion and the replacement cost of installed capital is equal to 3 billion, then Tobin's q is equal to ________.
A) 9
B) 3
C) 18
D) 2
Question 12Price flexibility is a key feature of ________.
A) traditional Keynesian theory
B) new Keynesian theory
C) real business cycle theory
D) traditional Keynesian, new Keynesian and real business cycle theory
Question 13If people begin to generally feel better about the future ________.
A) autonomous consumption should rise
B) autonomous investment should rise
C) the AD curve will shift to the right
D) all of the above
E) none of the above
Question 14If x is useful for predicting future GDP then
A) x is coincident.
B) x is a lagging variable.
C) x is countercyclical.
D) x is a leading variable.
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