Question 1

Each of the following is something that economists know about long-run growth except

Accepted Answer

A)  a good understanding of the development and diffusion of technology. 
B)  that better technology is the single most important key to sustained progress in material standards of living. 
C)  the importance of strong legal and institutional protections for private property. 
D)  the importance of a high rate of investment. 
A)  a good understanding of the development and diffusion of technology. 
B)  that better technology is the single most important key to sustained progress in material standards of living. 
C)  the importance of strong legal and institutional protections for private property. 
D)  the importance of a high rate of investment. A

Question 2

Each of the following is something that economists know about long-run growth except

Accepted Answer

A)  demography - Malthus, population explosion, and the demographic revolution. 
B)  the long-run relationship between kinds of investment and productivity growth. 
C)  the importance of education. 
D)  the importance of a high rate of investment. 
A)  demography - Malthus, population explosion, and the demographic revolution. 
B)  the long-run relationship between kinds of investment and productivity growth. 
C)  the importance of education. 
D)  the importance of a high rate of investment. B

Question 3

Each of the following is something that economists don't know but about which we are striving to learn except

Accepted Answer

A)  the short-run determinants of investment. 
B)  the long-run relationship between kinds of savings and productivity growth. 
C)  why international financial markets have been so vulnerable to financial crises over the past decade. 
D)  the relative roles played by "monetary" shocks and "real" shocks in generating short-run business cycles. 
A)  the short-run determinants of investment. 
B)  the long-run relationship between kinds of savings and productivity growth. 
C)  why international financial markets have been so vulnerable to financial crises over the past decade. 
D)  the relative roles played by "monetary" shocks and "real" shocks in generating short-run business cycles. B

Question 4

Each of the following is something that economists don't know but about which we are striving to learn except

Accepted Answer

A)  the long-run relationship between kinds of investment and productivity growth. 
B)  the short-run determinants of investment. 
C)  why international financial markets have been so vulnerable to financial crises over the past decade. 
D)  that a high rate of investment is necessary for achieving successful economic growth. 
A)  the long-run relationship between kinds of investment and productivity growth. 
B)  the short-run determinants of investment. 
C)  why international financial markets have been so vulnerable to financial crises over the past decade. 
D)  that a high rate of investment is necessary for achieving successful economic growth.

Question 5

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Accepted Answer

A)  that aggregate demand interacts with aggregate supply - the Phillips curve - to generate the level of real GDP. 
B)  that the expected rate of inflation depends critically on expectations of the central bank's competence and commitment to price stability. 
C)  that the natural rate of unemployment can undergo substantial shifts in a much more rapid time scale than the changing composition of the labor force would suggest possible. 
D)  that anything that affects aggregate demand affects employment and output. 
A)  that aggregate demand interacts with aggregate supply - the Phillips curve - to generate the level of real GDP. 
B)  that the expected rate of inflation depends critically on expectations of the central bank's competence and commitment to price stability. 
C)  that the natural rate of unemployment can undergo substantial shifts in a much more rapid time scale than the changing composition of the labor force would suggest possible. 
D)  that anything that affects aggregate demand affects employment and output.

Question 6

Each of the following is something that economists know about business cycles, unemployment, and inflation in the long run except

Accepted Answer

A)  the market economy does not tend to return to a position of near-full employment in the long run. 
B)  that markets for goods and labor do - absent large blockages - reach something like a supply-and-demand equilibrium. 
C)  that the central bank's policy is in the long run the absolutely crucial determinant of the price level and
The inflation rate. 
D)  that shortfalls of national saving or booms in investment will bring inflows of capital and the trade deficits needed to finance them. 
A)  the market economy does not tend to return to a position of near-full employment in the long run. 
B)  that markets for goods and labor do - absent large blockages - reach something like a supply-and-demand equilibrium. 
C)  that the central bank's policy is in the long run the absolutely crucial determinant of the price level and
The inflation rate. 
D)  that shortfalls of national saving or booms in investment will bring inflows of capital and the trade deficits needed to finance them.

Question 7

Each of the following is something that economists know about business cycles, unemployment, and inflation in the long run except

Accepted Answer

A)  that the market economy does tend to return to a position of near-full employment in the long run. 
B)  that markets for goods and labor don't always reach something like a supply-and-demand equilibrium. 
C)  that shifts in government spending will crowd out (or crowd in) consumption and investment. 
D)  that shortfalls of national saving or booms in investment will bring inflows of capital and the trade . deficits needed to finance them. 
A)  that the market economy does tend to return to a position of near-full employment in the long run. 
B)  that markets for goods and labor don't always reach something like a supply-and-demand equilibrium. 
C)  that shifts in government spending will crowd out (or crowd in) consumption and investment. 
D)  that shortfalls of national saving or booms in investment will bring inflows of capital and the trade . deficits needed to finance them.

Question 8

Each of the following is something that economists don't know about the microfoundations of macroeconomics except

Accepted Answer

A)  how aggregate consumption and savings decisions are made. 
B)  what determines the large shifts in the natural rate of unemployment. 
C)  what can be done to lower the natural rate of unemployment. 
D)  when it is beneficial for businesses to undertake projects that involve investment spending. 
A)  how aggregate consumption and savings decisions are made. 
B)  what determines the large shifts in the natural rate of unemployment. 
C)  what can be done to lower the natural rate of unemployment. 
D)  when it is beneficial for businesses to undertake projects that involve investment spending.

Question 9

Each of the following is something that economists know about the making of macroeconomic policy except

Accepted Answer

A)  that shifts in economic policy have certain and immediate effects on spending. 
B)  that controlling inflation can be accomplished at low cost if and only if investors, managers, and . workers have confidence in the central bank's commitment to control inflation. 
C)  that automatic stabilizers are important factors that help eliminate the need for discretionary stabilization policy. 
D)  that a good macroeconomic policy that seeks to avoid unnecessary unemployment and inflation must walk a fine lines. 
A)  that shifts in economic policy have certain and immediate effects on spending. 
B)  that controlling inflation can be accomplished at low cost if and only if investors, managers, and . workers have confidence in the central bank's commitment to control inflation. 
C)  that automatic stabilizers are important factors that help eliminate the need for discretionary stabilization policy. 
D)  that a good macroeconomic policy that seeks to avoid unnecessary unemployment and inflation must walk a fine lines.

Question 10

Each of the following is something that economists know about the making of macroeconomic policy except

Accepted Answer

A)  that shifts in economic policy have uncertain and delayed effects on spending. 
B)  that economic policy affects output and prices with long and variable lags. 
C)  that fiscal policy is the most useful discretionary stabilization policy tool. 
D)  that peacetime inflation at a level high enough that it becomes an important part of voters' . consciousness is politically unacceptable in modern industrial democracies. 
A)  that shifts in economic policy have uncertain and delayed effects on spending. 
B)  that economic policy affects output and prices with long and variable lags. 
C)  that fiscal policy is the most useful discretionary stabilization policy tool. 
D)  that peacetime inflation at a level high enough that it becomes an important part of voters' . consciousness is politically unacceptable in modern industrial democracies.

Question 11

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Accepted Answer

A)  that the basic Keynesian sticky-price model still provides a good guide to the basic determinants of the level of aggregate demand. 
B)  that the Phillips curve is extremely volatile. 
C)  that anything that affects aggregate demand affects employment and output. 
D)  that aggregate supply is the principal determinant of the level of real GDP in the short run. 
A)  that the basic Keynesian sticky-price model still provides a good guide to the basic determinants of the level of aggregate demand. 
B)  that the Phillips curve is extremely volatile. 
C)  that anything that affects aggregate demand affects employment and output. 
D)  that aggregate supply is the principal determinant of the level of real GDP in the short run.

Question 12

Each of the following is something that economists don't know about the microfoundations of macroeconomics except

Accepted Answer

A)  the underlying reasons why wages and prices are slow to respond to shifts in aggregate demand. 
B)  how much time the average job losing worker should spend looking for a job. 
C)  why households and businesses hold some of their wealth as money. 
D)  how aggregate consumption and savings decisions are made. 
A)  the underlying reasons why wages and prices are slow to respond to shifts in aggregate demand. 
B)  how much time the average job losing worker should spend looking for a job. 
C)  why households and businesses hold some of their wealth as money. 
D)  how aggregate consumption and savings decisions are made.

Question 13

Each of the following is something that economists know about the current state of the economy except

Accepted Answer

A)  good estimates of the level of potential output. 
B)  good estimates of the current real wage level. 
C)  good estimates of the amount of unemployment. 
D)  the short-run determinants of investment. 
A)  good estimates of the level of potential output. 
B)  good estimates of the current real wage level. 
C)  good estimates of the amount of unemployment. 
D)  the short-run determinants of investment.

Question 14

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Accepted Answer

A)  that the basic Keynesian sticky-price model still provides a good guide to the basic determinants of the level of aggregate demand. 
B)  that the aggregate supply-Phillips curve diagram still provides a guide to the relationship between the level of real aggregate demand and the rate of price increase. 
C)  that the Phillips curve is very stable. 
D)  that aggregate demand is the principal determinant of the level of real GDP in the short run. 
A)  that the basic Keynesian sticky-price model still provides a good guide to the basic determinants of the level of aggregate demand. 
B)  that the aggregate supply-Phillips curve diagram still provides a guide to the relationship between the level of real aggregate demand and the rate of price increase. 
C)  that the Phillips curve is very stable. 
D)  that aggregate demand is the principal determinant of the level of real GDP in the short run.

Question 15

Each of the following is something that economists know about the making of macroeconomic policy except

Accepted Answer

A)  that automatic stabilizers are important factors that help eliminate the need for discretionary stabilization policy. 
B)  that economic policy affects output and prices with known lags. 
C)  that monetary policy is the most useful discretionary stabilization policy tool. 
D)  that growth in the money supply is the ultimate determinate of inflation. 
A)  that automatic stabilizers are important factors that help eliminate the need for discretionary stabilization policy. 
B)  that economic policy affects output and prices with known lags. 
C)  that monetary policy is the most useful discretionary stabilization policy tool. 
D)  that growth in the money supply is the ultimate determinate of inflation.

Question 16

Each of the following is something that economists know about the current state of the economy except

Accepted Answer

A)  good estimates of the general state of the labor market. 
B)  good estimates of the current real wage level 
C)  a good understanding of the impact of government policy on the economy. 
D)  good estimates of the rate of inflation 
A)  good estimates of the general state of the labor market. 
B)  good estimates of the current real wage level 
C)  a good understanding of the impact of government policy on the economy. 
D)  good estimates of the rate of inflation

Question 17

Each of the following is something that economists don't know about the impact of government policy on the economy except

Accepted Answer

A)  the aggressiveness with which central bankers should pursue stabilization policy 
B)  the extent to which we should worry about large government budget deficits. 
C)  the ultimate determinate of inflation. 
D)  the lag structure involved with the effect of economic policy on output and prices. 
A)  the aggressiveness with which central bankers should pursue stabilization policy 
B)  the extent to which we should worry about large government budget deficits. 
C)  the ultimate determinate of inflation. 
D)  the lag structure involved with the effect of economic policy on output and prices.

Question 18

Each of the following is something that economists know about long-run growth except

Accepted Answer

A)  that activities with negative externalities like pollution need to be penalized. 
B)  that activities with positive externalities like research and development need to be encouraged. 
C)  the unimportance of strong legal and institutional protections for private property. 
D)  that central planning and central commands are the wrong kinds of government policy. 
A)  that activities with negative externalities like pollution need to be penalized. 
B)  that activities with positive externalities like research and development need to be encouraged. 
C)  the unimportance of strong legal and institutional protections for private property. 
D)  that central planning and central commands are the wrong kinds of government policy.

Question 19

Each of the following is something that economists know about long-run growth except

Accepted Answer

A)  that government policy needs to provide the market economy with the right incentives and signals if it is to function. 
B)  that better technology is the single most important key to sustained progress in material standards of living. 
C)  the importance of strong legal and institutional protections for private property. 
D)  that central planning and central commands are the right kinds of government policy. 
A)  that government policy needs to provide the market economy with the right incentives and signals if it is to function. 
B)  that better technology is the single most important key to sustained progress in material standards of living. 
C)  the importance of strong legal and institutional protections for private property. 
D)  that central planning and central commands are the right kinds of government policy.

Question 20

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Accepted Answer

A)  that aggregate demand interacts with aggregate supply - the Phillips curve - to generate the inflation rate. 
B)  that the expected rate of inflation hardly ever changes. 
C)  that the natural rate of unemployment can undergo substantial shifts in a much more rapid time scale . than the changing composition of the labor force would suggest possible. 
D)  that aggregate demand is the principal determinant of the level of real GDP in the short run. 
A)  that aggregate demand interacts with aggregate supply - the Phillips curve - to generate the inflation rate. 
B)  that the expected rate of inflation hardly ever changes. 
C)  that the natural rate of unemployment can undergo substantial shifts in a much more rapid time scale . than the changing composition of the labor force would suggest possible. 
D)  that aggregate demand is the principal determinant of the level of real GDP in the short run.

Each of the following is something that economists know about long-run growth except

Each of the following is something that economists know about long-run growth except

Each of the following is something that economists don't know but about which we are striving to learn except

Each of the following is something that economists don't know but about which we are striving to learn except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the long run except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the long run except

Each of the following is something that economists don't know about the microfoundations of macroeconomics except

Each of the following is something that economists know about the making of macroeconomic policy except

Each of the following is something that economists know about the making of macroeconomic policy except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Each of the following is something that economists don't know about the microfoundations of macroeconomics except

Each of the following is something that economists know about the current state of the economy except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Each of the following is something that economists know about the making of macroeconomic policy except

Each of the following is something that economists know about the current state of the economy except

Each of the following is something that economists don't know about the impact of government policy on the economy except

Each of the following is something that economists know about long-run growth except

Each of the following is something that economists know about long-run growth except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Introduction to Macroeconomics

Measuring the Macroeconomy

Thinking Like an Economist

The Theory of Economic Growth

The Reality of Economic Growth: History and Prospect

Building Blocks of the Flexible-Price Model

Equilibrium in the Flexible-Price M Odel

Money, Prices, and Inflation

The Sticky-Price Income-Expenditure Framework: Consumption and the Multiplier

Investment, Net Exports, and Interest Rates: The Is Curve

The Money Market and the LM Curve

The Phillips Curve, Expectations, and Monetary Policy

Stabilization Policy

Budget Balance, National Debt, and Investment

International Economic Policy

Changes in the Macroeconomy and Changes in Macroeconomic Policy

The Future of Macroeconomics

Filters

Exam 18: Epilogue

Each of the following is something that economists know about long-run growth except

Each of the following is something that economists know about long-run growth except

Each of the following is something that economists don't know but about which we are striving to learn except

Each of the following is something that economists don't know but about which we are striving to learn except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the long run except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the long run except

Each of the following is something that economists don't know about the microfoundations of macroeconomics except

Each of the following is something that economists know about the making of macroeconomic policy except

Each of the following is something that economists know about the making of macroeconomic policy except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Each of the following is something that economists don't know about the microfoundations of macroeconomics except

Each of the following is something that economists know about the current state of the economy except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Each of the following is something that economists know about the making of macroeconomic policy except

Each of the following is something that economists know about the current state of the economy except

Each of the following is something that economists don't know about the impact of government policy on the economy except

Each of the following is something that economists know about long-run growth except

Each of the following is something that economists know about long-run growth except

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

Introduction to Macroeconomics

Measuring the Macroeconomy

Thinking Like an Economist

The Theory of Economic Growth

The Reality of Economic Growth: History and Prospect

Building Blocks of the Flexible-Price Model

Equilibrium in the Flexible-Price M Odel

Money, Prices, and Inflation

The Sticky-Price Income-Expenditure Framework: Consumption and the Multiplier

Investment, Net Exports, and Interest Rates: The Is Curve

The Money Market and the LM Curve

The Phillips Curve, Expectations, and Monetary Policy

Stabilization Policy

Budget Balance, National Debt, and Investment

International Economic Policy

Changes in the Macroeconomy and Changes in Macroeconomic Policy

The Future of Macroeconomics

Filters