Question 1

According to the market clearing model a permanent increase in government purchases causes an increase in:

Accepted Answer

A) real GDP. 
B) the real interest rate. 
C) the real wage rate. 
D) none of the above. 
A) real GDP. 
B) the real interest rate. 
C) the real wage rate. 
D) none of the above.

Question 2

The model predicts a permanent decrease in government purchases causes:

Accepted Answer

A) an increase consumption. 
B) an increases the real interest rate. 
C) an increases real GDP. 
D) all of the above. 
A) an increase consumption. 
B) an increases the real interest rate. 
C) an increases real GDP. 
D) all of the above.

Question 3

Since the Great Recession in 2008-09 government expenditure as a percentage of GDP have been:

Accepted Answer

A) generally rising. 
B) generally falling. 
C) cyclical. 
D) constant. 
A) generally rising. 
B) generally falling. 
C) cyclical. 
D) constant.

Question 4

According to the market clearing model, a one-unit temporary decrease in government purchases causes:

Accepted Answer

A) a one-unit decrease in GDP. 
B) gross investment to rise about one unit. 
C) consumption to rise about one unit. 
D) all of the above. 
A) a one-unit decrease in GDP. 
B) gross investment to rise about one unit. 
C) consumption to rise about one unit. 
D) all of the above.

Question 5

A permanent increase in government purchases increases GDP.

Accepted Answer

A) True 
 B)False

Question 6

The biggest category of government purchases in the Eurozone is:

Accepted Answer

A) interest payments. 
B) defense purchases. 
C) general government purchases. 
D) transfer payments. 
A) interest payments. 
B) defense purchases. 
C) general government purchases. 
D) transfer payments.

Question 7

Eurozone data since 1999 shows that permanent changes in government purchases are:

Accepted Answer

A) acyclical as the model predicts. 
B) procyclical as the model predicts. 
C) acyclical as opposed to the model that predicts they will be procyclical. 
D) countercyclical as opposed to the model that predicts they will be acyclical. 
A) acyclical as the model predicts. 
B) procyclical as the model predicts. 
C) acyclical as opposed to the model that predicts they will be procyclical. 
D) countercyclical as opposed to the model that predicts they will be acyclical.

Question 8

The government budget constraint without borrowing is:

Accepted Answer

A) Gt + Vt = Tt + (Mt - Mt-1 )/P 
B) Gt = Tt + Vt 
C) Gt - Vt = Tt 
D) Gt - Vt = Tt - (Mt - Mt-1 )/P 
A) Gt + Vt = Tt + (Mt - Mt-1 )/P 
B) Gt = Tt + Vt 
C) Gt - Vt = Tt 
D) Gt - Vt = Tt - (Mt - Mt-1 )/P

Question 9

If a household's transfer payments less taxes is negative, then the government:

Accepted Answer

A) is a net source of funds for that household. 
B) is a net use of fund of funds for that household. 
C) is a net subsidizer of that household. 
D) does not affect that household's budget constraint. 
A) is a net source of funds for that household. 
B) is a net use of fund of funds for that household. 
C) is a net subsidizer of that household. 
D) does not affect that household's budget constraint.

Question 10

If a household's transfer payment less taxes is greater than zero, then government is a net source of funds for that household.

Accepted Answer

A) True 
 B)False

Question 11

According to the market clearing model, a one-unit temporary decrease in government purchases causes:

Accepted Answer

A) no change in GDP. 
B) investment to rise about one unit. 
C) no change in the interest rate. 
D) all of the above. 
A) no change in GDP. 
B) investment to rise about one unit. 
C) no change in the interest rate. 
D) all of the above.

Question 12

The model predicts that a temporary decrease in government expenditures will lead to:

Accepted Answer

A) an increase in real wages. 
B) a decrease in the real interest rate. 
C) a decrease in GDP. 
D) none of the above. 
A) an increase in real wages. 
B) a decrease in the real interest rate. 
C) a decrease in GDP. 
D) none of the above.

Question 13

Among the government's uses of funds are;

Accepted Answer

A) government purchases. 
B) tax revenue. 
C) real revenue from printing money. 
D) all of the above. 
A) government purchases. 
B) tax revenue. 
C) real revenue from printing money. 
D) all of the above.

Question 14

A temporary increase in government expenditures will reduce gross investment.

Accepted Answer

A) True 
 B)False

Question 15

According to the market clearing model a one-unit permanent increase in government purchases causes:

Accepted Answer

A) no change in GDP. 
B) consumption to fall about one unit. 
C) no change in gross investment. 
D) all of the above. 
A) no change in GDP. 
B) consumption to fall about one unit. 
C) no change in gross investment. 
D) all of the above.

Question 16

Central and local governments purchases are about half:

Accepted Answer

A) interest on debt. 
B) transfer payments. 
C) defense. 
D) none of the above. 
A) interest on debt. 
B) transfer payments. 
C) defense. 
D) none of the above.

Question 17

According to the market clearing model a permanent increase in government purchases leads to:

Accepted Answer

A) an increase in capital utilization. 
B) a decrease in the supply of capita services. 
C) an increase in the demand for capital services. 
D) no change in the real rate of interest. 
A) an increase in capital utilization. 
B) a decrease in the supply of capita services. 
C) an increase in the demand for capital services. 
D) no change in the real rate of interest.

Question 18

In the market clearing model a permanent decrease in government purchase will:

Accepted Answer

A) increase consumption. 
B) increase the real interest rate. 
C) increase the real wage rate. 
D) all of the above. 
A) increase consumption. 
B) increase the real interest rate. 
C) increase the real wage rate. 
D) all of the above.

Question 19

According to the market clearing model, a one-unit permanent increase in government purchases causes:

Accepted Answer

A) GDP to rise about one unit. 
B) consumption to fall about one unit. 
C) gross investment to fall about one unit. 
D) all of the above. 
A) GDP to rise about one unit. 
B) consumption to fall about one unit. 
C) gross investment to fall about one unit. 
D) all of the above.

Question 20

Governments purchases include:

Accepted Answer

A) defense spending. 
B) education spending. 
C) social security retirement spending. 
D) all of the above. 
A) defense spending. 
B) education spending. 
C) social security retirement spending. 
D) all of the above.

According to the market clearing model a permanent increase in government purchases causes an increase in:

The model predicts a permanent decrease in government purchases causes:

Since the Great Recession in 2008-09 government expenditure as a percentage of GDP have been:

According to the market clearing model, a one-unit temporary decrease in government purchases causes:

A permanent increase in government purchases increases GDP.

The biggest category of government purchases in the Eurozone is:

Eurozone data since 1999 shows that permanent changes in government purchases are:

The government budget constraint without borrowing is:

If a household's transfer payments less taxes is negative, then the government:

If a household's transfer payment less taxes is greater than zero, then government is a net source of funds for that household.

According to the market clearing model, a one-unit temporary decrease in government purchases causes:

The model predicts that a temporary decrease in government expenditures will lead to:

Among the government's uses of funds are;

A temporary increase in government expenditures will reduce gross investment.

According to the market clearing model a one-unit permanent increase in government purchases causes:

Central and local governments purchases are about half:

According to the market clearing model a permanent increase in government purchases leads to:

In the market clearing model a permanent decrease in government purchase will:

According to the market clearing model, a one-unit permanent increase in government purchases causes:

Governments purchases include:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

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Exam 13: Government Expenditure

According to the market clearing model a permanent increase in government purchases causes an increase in:

The model predicts a permanent decrease in government purchases causes:

Since the Great Recession in 2008-09 government expenditure as a percentage of GDP have been:

According to the market clearing model, a one-unit temporary decrease in government purchases causes:

A permanent increase in government purchases increases GDP.

The biggest category of government purchases in the Eurozone is:

Eurozone data since 1999 shows that permanent changes in government purchases are:

The government budget constraint without borrowing is:

If a household's transfer payments less taxes is negative, then the government:

If a household's transfer payment less taxes is greater than zero, then government is a net source of funds for that household.

According to the market clearing model, a one-unit temporary decrease in government purchases causes:

The model predicts that a temporary decrease in government expenditures will lead to:

Among the government's uses of funds are;

A temporary increase in government expenditures will reduce gross investment.

According to the market clearing model a one-unit permanent increase in government purchases causes:

Central and local governments purchases are about half:

According to the market clearing model a permanent increase in government purchases leads to:

In the market clearing model a permanent decrease in government purchase will:

According to the market clearing model, a one-unit permanent increase in government purchases causes:

Governments purchases include:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters