Exam 5: A Closed-Economy One-Period Macroeconomic Model

An increase in government spending shifts the PPF

A competitive equilibrium may fail to be Pareto-optimal due to

An economy that engages in international trade is called

The concept of Pareto optimality is a

Making use of an economic model is a process of

An externality is any activity for which an individual firm or consumer does NOT take into account all

Relative to the social optimum, monopoly power directly leads to

The government spending multiplier is

The first fundamental theorem of welfare economics states that

The production possibilities frontier in the one-period model is a

An increase in total factor productivity involves

In the model with Keynesian sticky wages and prices, if the representative consumer is working too much given the market real wage, then

In an economic model

Intertemporal substitution of labour suggests that

No questions were provided for this section.

In an economic model, an exogenous variable is

In the model with Keynesian sticky wages and prices

The rate at which one good can be converted technologically into another is called

In an economic model, government spending is assumed to be

In response to an increase in total factor productivity