Question # 1

The costs of disinflation would be low if

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Expected inflation falls as inflation falls

Wages and price controls were used

The Phillips curve were nearly horizontal

The Phillips curve adjusted slowly to changes in inflation

A temporary decrease in government purchases would cause.

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A rightward shift in the saving curve and a leftward shift in the investment curve

A rightward shift in the saving curve and a rightwards shift in the investment curve.

A right ward shift in the saving curve but no shift in the investment curve

No shift in the saving curve but a left ward shift in the investment curve.

A technological improvement will

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Increases the desired capital stock

Decrease the desired capital stock

Have no effect on the desired capital stock

Have the same effect on the desired capital stock as an increase in corporate taxes.

Most industrial construes generally considered _______ as the most important economic goal

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External balance

Internal balance

Maximum efficiency for business

Maximum efficiency for labor

When all markets in the economy are simultaneously in equilibrium we say.

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Markets are complete

Markets are perfect

There is disequilibrium

There is general equilibrium.

A decline expected future output would cause the IS curve to.

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Shift up and to the right

Shift down and to the left

Remain unchanged

shift up and to the right only if people face borrowing constratints.

The estimated regression coefficient for good Y indicates

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Goods X and Y are independent goods

Good Y is relatively elastic

Good Y is a luxury good

Goods X and Y are complementary goods

The normal interest rate minus the inflation rate is the

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Depreciation rate

Discount rate

Real interest rate

Forward rate

Which of the following is not a primary cause of business cycle fluctuations according to real business cycle theory.

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A change in the production function

A change in the size of the labor force

A change in the money supply

A change in the real quantity of government purchases

Keynesian economists think general equilibrium is not attained quickly because.

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The real interest rate adjusts slowly

The level of output adjusts slowly

The real wage rate adjusts slowly

The price level adjusts quickly

The equilibrium level of employment achieved after the complete adjustment of wages and prices, is known as the.

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Zero unemployment level of employment

Natural state

Invisible handshake

Full employment level of employment

When the value of output exceeds planned spending .

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There is unsold output, and the level of income will fall

there is unsold output and the level of income will rise

There is unsold output, and the level of income does not change.

All of the above

According to Keynesians the primary source of business cycle fluctuation is.

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Aggregate demand shocks

Productivity shocks

Oil price shocks

Consumer confidence shocks

Which of the following in a graph with interest rates and income on the vertical and horizontal axes, does not shift the balance of payments curve to the right.

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Capital flow restrictions

Export quotas

Export subsidies

Import tariffs

The two main characteristics of the production function are.

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It slopes downward from left to right and the slope become flatter as teh input increases

It slopes upward from left to the right the slope becomes steeper as the input increase

It slopes upward from left to right unput increases

It slopes downward from left to right and the slope becomes steeper ath the input increase

A temporary adverse productivity shock would.

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Shift the labor supply curve upward

Decrease the level of employment

Decrease future income

Decrease the expected future marginal product of capital

"An Enquiry into the Nature and causes of wealth of Nations" is thebook of economist.

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Adam smith

Marshall

Robbins

None of above

Expansionary monetary policy

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Tends to lead to an appreciation of nation's currency

Usually has no effect on a currency's exchange value

Tends to lea dto a depreciation of the currencies of other nations

Tends to lead to a depreciation of a nation's currency.

In a private sector model

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Household saving is a leakage from the circular flow

Investment is a spending injection

All of the above

None of the above

The origin of the idea of a trae off between inflation and unemployment was a 1958 article by

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A.W Philips

Edmund phelps

Milton Friedman

Robert Gordon

The government budget surplus equals

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Government purchases plus transfers

Net government receipts minus government purchases

Government purchases minus net receipts

Government purchases minus transfers.

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