Question 1

Intertemporal substitution effects are substitution effects over time.

Accepted Answer

A) True 
 B)False

Question 2

Eurozone real average earnings of production workers since 1999 has been:

Accepted Answer

A) mildly procyclical. 
B) mildly countercyclical. 
C) acyclical. 
D) exogenous. 
A) mildly procyclical. 
B) mildly countercyclical. 
C) acyclical. 
D) exogenous.

Question 3

During an economic expansion due to an increase in technology, A, consumption will:

Accepted Answer

A) tend to rise due to the income effect. 
B) may rise or fall depending on whether the income effect is greater than the substitution effect or not. 
C) tend to fall due to the intertemporal substitution effect of the interest rate rising. 
D) all of the above. 
A) tend to rise due to the income effect. 
B) may rise or fall depending on whether the income effect is greater than the substitution effect or not. 
C) tend to fall due to the intertemporal substitution effect of the interest rate rising. 
D) all of the above.

Question 4

A higher real wage:

Accepted Answer

A) increases the income of households inducing them to work more. 
B) decreases the income of households inducing them to work more. 
C) increases the income of households inducing them to work less. 
D) decreases the income of households inducing them to work less. 
A) increases the income of households inducing them to work more. 
B) decreases the income of households inducing them to work more. 
C) increases the income of households inducing them to work less. 
D) decreases the income of households inducing them to work less.

Question 5

A higher interest rate makes:

Accepted Answer

A) current consumption and leisure more expensive. 
B) current consumption cheaper and current. leisure more expensive. 
C) current consumption and leisure cheaper. 
D) current consumption more expensive and current leisure cheaper. 
A) current consumption and leisure more expensive. 
B) current consumption cheaper and current. leisure more expensive. 
C) current consumption and leisure cheaper. 
D) current consumption more expensive and current leisure cheaper.

Question 6

A higher real wage:

Accepted Answer

A) makes consumption more expensive. 
B) makes it a worse deal for households to work an extra hour. 
C) makes leisure less expensive. 
D) makes leisure more expensive. 
A) makes consumption more expensive. 
B) makes it a worse deal for households to work an extra hour. 
C) makes leisure less expensive. 
D) makes leisure more expensive.

Question 7

In the model with an upward sloping supply curve of labour and increase demand for labour due to a positive technological, A, change:

Accepted Answer

A) increases employment and the real wage. 
B) decreases employment and increases the real wage. 
C) decreases employment and the real wage. 
A) increases employment and the real wage. 
B) decreases employment and increases the real wage. 
C) decreases employment and the real wage.

Question 8

Temporary changes in technology, A, conflict with the data in that:

Accepted Answer

A) investment is clearly acyclical. 
B) consumption is clearly procyclical. 
C) the wage rate is clearly countercyclical. 
D) all of the above. 
A) investment is clearly acyclical. 
B) consumption is clearly procyclical. 
C) the wage rate is clearly countercyclical. 
D) all of the above.

Question 9

An increase in the interest rate makes future consumption cheaper and future leisure more expensive.

Accepted Answer

A) True 
 B)False

Question 10

An increase in the interest rate induces worker to:

Accepted Answer

A) work more in the current period and less in the future. 
B) work more in the current period and in the future. 
C) work less in the current period and more in the future. 
D) work less in the current period and in the future. 
A) work more in the current period and less in the future. 
B) work more in the current period and in the future. 
C) work less in the current period and more in the future. 
D) work less in the current period and in the future.

Question 11

The model predicts that an economic expansion caused by a temporary increase in technology, A, would lead to:

Accepted Answer

A) high real GDP and investment. 
B) low real GDP and high real investment. 
C) low real GDP and investment. 
D) high real GDP and low real investment. 
A) high real GDP and investment. 
B) low real GDP and high real investment. 
C) low real GDP and investment. 
D) high real GDP and low real investment.

Question 12

If there is a permanent increase in technology, A, then we expect consumption to:

Accepted Answer

A) increase by more than real GDP. 
B) increase by the same amount as real GDP. 
C) increase but by less than real GDP. 
D) be unchanged. 
A) increase by more than real GDP. 
B) increase by the same amount as real GDP. 
C) increase but by less than real GDP. 
D) be unchanged.

Question 13

If there is a positive technological change, what happens in the labour market?

Accepted Answer

The marginal product of labour

Question 14

Eurozone real gross domestic private investment since 1999 has been:

Accepted Answer

A) procyclical. 
B) countercyclical. 
C) a cyclical. 
D) exogenous. 
A) procyclical. 
B) countercyclical. 
C) a cyclical. 
D) exogenous.

Question 15

Real GDP equals:

Accepted Answer

A) trend real GDP plus the cyclical part of GDP 
B) trend real GDP times the cyclical part of GDP. 
C) trend real GDP less the cyclical part of GDP. 
D) trend real GDP divided by the cyclical part of GDP. 
A) trend real GDP plus the cyclical part of GDP 
B) trend real GDP times the cyclical part of GDP. 
C) trend real GDP less the cyclical part of GDP. 
D) trend real GDP divided by the cyclical part of GDP.

Question 16

An example of a temporary change in technology would be:

Accepted Answer

A) a new discovery. 
B) a general strike. 
C) a new invention. 
D) all of the above. 
A) a new discovery. 
B) a general strike. 
C) a new invention. 
D) all of the above.

Question 17

With a temporary positive change in technology we would expect real current consumption:

Accepted Answer

A) to increase a lot. 
B) to decrease a lot. 
C) to remain unchanged. 
D) to either increase or decrease a little. 
A) to increase a lot. 
B) to decrease a lot. 
C) to remain unchanged. 
D) to either increase or decrease a little.

Question 18

With a temporary change in technology, we would expect:

Accepted Answer

A) the income effect of consumption to be larger. 
B) the income effect of consumption to be smaller. 
C) the intertemporal substitution effect on consumption to be larger. 
A) the income effect of consumption to be larger. 
B) the income effect of consumption to be smaller. 
C) the intertemporal substitution effect on consumption to be larger.

Question 19

With a temporary change in technology the model predicts:

Accepted Answer

A) the interest rate will be procyclical. 
B) a lower interest rate will motivate households to increase current real consumption. 
C) a higher interest rate will motivate households to increase current real saving. 
D) all of the above. 
A) the interest rate will be procyclical. 
B) a lower interest rate will motivate households to increase current real consumption. 
C) a higher interest rate will motivate households to increase current real saving. 
D) all of the above.

Question 20

An countercyclical variable is one that:

Accepted Answer

A) moves the same direction as real GDP. 
B) has little tendency to move during a business cycle. 
C) moves the opposite direction as real GDP. 
D) determined outside the model. 
A) moves the same direction as real GDP. 
B) has little tendency to move during a business cycle. 
C) moves the opposite direction as real GDP. 
D) determined outside the model.

Intertemporal substitution effects are substitution effects over time.

Eurozone real average earnings of production workers since 1999 has been:

During an economic expansion due to an increase in technology, A, consumption will:

A higher real wage:

A higher interest rate makes:

A higher real wage:

In the model with an upward sloping supply curve of labour and increase demand for labour due to a positive technological, A, change:

Temporary changes in technology, A, conflict with the data in that:

An increase in the interest rate makes future consumption cheaper and future leisure more expensive.

An increase in the interest rate induces worker to:

The model predicts that an economic expansion caused by a temporary increase in technology, A, would lead to:

If there is a permanent increase in technology, A, then we expect consumption to:

If there is a positive technological change, what happens in the labour market?

Eurozone real gross domestic private investment since 1999 has been:

Real GDP equals:

An example of a temporary change in technology would be:

With a temporary positive change in technology we would expect real current consumption:

With a temporary change in technology, we would expect:

With a temporary change in technology the model predicts:

An countercyclical variable is one that:

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

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

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

Exam 9: An Equilibrium Business-Cycle Model

Intertemporal substitution effects are substitution effects over time.

Eurozone real average earnings of production workers since 1999 has been:

During an economic expansion due to an increase in technology, A, consumption will:

A higher real wage:

A higher interest rate makes:

A higher real wage:

In the model with an upward sloping supply curve of labour and increase demand for labour due to a positive technological, A, change:

Temporary changes in technology, A, conflict with the data in that:

An increase in the interest rate makes future consumption cheaper and future leisure more expensive.

An increase in the interest rate induces worker to:

The model predicts that an economic expansion caused by a temporary increase in technology, A, would lead to:

If there is a permanent increase in technology, A, then we expect consumption to:

If there is a positive technological change, what happens in the labour market?

Eurozone real gross domestic private investment since 1999 has been:

Real GDP equals:

An example of a temporary change in technology would be:

With a temporary positive change in technology we would expect real current consumption:

With a temporary change in technology, we would expect:

With a temporary change in technology the model predicts:

An countercyclical variable is one that:

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

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

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