Question 1

A tariff is

Accepted Answer

A) a tax for transporting goods between provinces. 
B) a tax on an imported good or goods. 
C) an import quota. 
D) a value-added tax. 
E) an export subsidy. 
A) a tax for transporting goods between provinces. 
B) a tax on an imported good or goods. 
C) an import quota. 
D) a value-added tax. 
E) an export subsidy.

Question 2

Suppose that the small open economy (SOE)cannot produce consumption goods, but domestic producers can produce investment goods. If a tariff t is imposed by the SOE on imports of goods
From the rest of the world, and the rest of the world imposes a tariff t on exports from the SOE to
The rest of the world, then

Accepted Answer

A) exports increase 
B) output increases. 
C) trade increases. 
D) firms will not produce anything. 
E) investment increases. 
A) exports increase 
B) output increases. 
C) trade increases. 
D) firms will not produce anything. 
E) investment increases.

Question 3

A small open economy is an economy

Accepted Answer

A) whose firms and consumers are individually, but not collectively price takers. 
B) in which both imports and exports are less than 5% of GDP. 
C) that is open to ideas. 
D) whose firms and consumers are individually and collectively price takers. 
E) whose firms and consumers are collectively, but not individually price takers. 
A) whose firms and consumers are individually, but not collectively price takers. 
B) in which both imports and exports are less than 5% of GDP. 
C) that is open to ideas. 
D) whose firms and consumers are individually and collectively price takers. 
E) whose firms and consumers are collectively, but not individually price takers.

Question 4

In a two-period model, holding everything else constant, an increase in future taxes

Accepted Answer

A) has no effect on the current account surplus, as long as Ricardian equivalence holds. 
B) increases the present value of taxes. 
C) unambiguously decreases the current account surplus. 
D) unambiguously increases the current account surplus. 
E) has an uncertain effect on the current account surplus. 
A) has no effect on the current account surplus, as long as Ricardian equivalence holds. 
B) increases the present value of taxes. 
C) unambiguously decreases the current account surplus. 
D) unambiguously increases the current account surplus. 
E) has an uncertain effect on the current account surplus.

Question 5

An increase in total factor productivity in a closed economy

Accepted Answer

A) increases labour demand, increases the real wage, increases output and decreases the real interest rate. 
B) increases labour demand, increases the real wage, increases output and increases the real interest rate. 
C) increases labour demand, decreases the real wage, decreases output and decreases the real interest rate. 
D) decreases labour demand, increases the real wage, increases output and decreases the real interest rate. 
E) increases labour demand, decreases the real wage, decreases output and increases the real interest rate. 
A) increases labour demand, increases the real wage, increases output and decreases the real interest rate. 
B) increases labour demand, increases the real wage, increases output and increases the real interest rate. 
C) increases labour demand, decreases the real wage, decreases output and decreases the real interest rate. 
D) decreases labour demand, increases the real wage, increases output and decreases the real interest rate. 
E) increases labour demand, decreases the real wage, decreases output and increases the real interest rate.

Question 6

In a two-period model with default, the nation defaults on its debt in the current period if

Accepted Answer

A) the government does not act in the interest of consumers. 
B) the market interest rate is low, the cost of defaulting is low, and national debt is high. 
C) the market interest rate is high, the cost of defaulting is low, and national debt is high. 
D) the market interest rate is high, the cost of defaulting is high, and national debt is low. 
E) the market interest rate is low, the cost of defaulting is high, and national debt is low. 
A) the government does not act in the interest of consumers. 
B) the market interest rate is low, the cost of defaulting is low, and national debt is high. 
C) the market interest rate is high, the cost of defaulting is low, and national debt is high. 
D) the market interest rate is high, the cost of defaulting is high, and national debt is low. 
E) the market interest rate is low, the cost of defaulting is high, and national debt is low.

Question 7

In the two-period SOE model, if future income decreases

Accepted Answer

A) C + G stays the same. 
B) the current account surplus stays the same. 
C) the current account surplus increases. 
D) the current account surplus decreases. 
E) C + G decreases. 
A) C + G stays the same. 
B) the current account surplus stays the same. 
C) the current account surplus increases. 
D) the current account surplus decreases. 
E) C + G decreases.

Question 8

An increase in total factor productivity has different effects in an open economy relative to a closed economy because

Accepted Answer

A) the real interest rate does not change in the open economy. 
B) the real interest rate does not change in the closed economy. 
C) it is a positive income effect in the closed economy and a negative one in the open economy. 
D) the change in the real interest rate involves a substitution effect only in the open economy. 
E) the real interest rate decreases in the open economy and increases in the closed economy. 
A) the real interest rate does not change in the open economy. 
B) the real interest rate does not change in the closed economy. 
C) it is a positive income effect in the closed economy and a negative one in the open economy. 
D) the change in the real interest rate involves a substitution effect only in the open economy. 
E) the real interest rate decreases in the open economy and increases in the closed economy.

Question 9

In the two-period SOE model with production and investment, an increase in the capital stock

Accepted Answer

A) decreases investment. 
B) increases output. 
C) reduces the current account surplus. 
D) increases investment. 
E) reduces output. 
A) decreases investment. 
B) increases output. 
C) reduces the current account surplus. 
D) increases investment. 
E) reduces output.

A tariff is

A small open economy is an economy

In a two-period model, holding everything else constant, an increase in future taxes

An increase in total factor productivity in a closed economy

In a two-period model with default, the nation defaults on its debt in the current period if

In the two-period SOE model, if future income decreases

An increase in total factor productivity has different effects in an open economy relative to a closed economy because

In the two-period SOE model with production and investment, an increase in the capital stock

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters

Exam 15: Inflation: Phillips Curves and Neo-Fisherism

A tariff is

A small open economy is an economy

In a two-period model, holding everything else constant, an increase in future taxes

An increase in total factor productivity in a closed economy

In a two-period model with default, the nation defaults on its debt in the current period if

In the two-period SOE model, if future income decreases

An increase in total factor productivity has different effects in an open economy relative to a closed economy because

In the two-period SOE model with production and investment, an increase in the capital stock

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters