Question 1

Points on the production possibilities frontier have the property that they

Accepted Answer

A)  are inherently unattainable. 
B)  show the maximum amount of leisure that can be consumed for given amounts of goods consumed. 
C)  show the maximum amount of goods that can be consumed for given amounts of government spending. 
D)  show the maximum amount of leisure that can be consumed for given amounts of hours worked. 
A)  are inherently unattainable. 
B)  show the maximum amount of leisure that can be consumed for given amounts of goods consumed. 
C)  show the maximum amount of goods that can be consumed for given amounts of government spending. 
D)  show the maximum amount of leisure that can be consumed for given amounts of hours worked.

Question 2

A competitive equilibrium

Accepted Answer

A)  is always economically efficient. 
B)  is efficient only if there is an externality. 
C)  is economically efficient only given some special conditions. 
D)  does not exist without government taxation. 
A)  is always economically efficient. 
B)  is efficient only if there is an externality. 
C)  is economically efficient only given some special conditions. 
D)  does not exist without government taxation.

Question 3

A competitive equilibrium fails to be a Pareto Optimum with a distorting tax because

Accepted Answer

A)  the consumer's budget constraint has an additional kink. 
B)  the firm is no longer maximizing profits. 
C)  the government wastes its revenue. 
D)  the consumer faces a different effective wage than the firm. 
A)  the consumer's budget constraint has an additional kink. 
B)  the firm is no longer maximizing profits. 
C)  the government wastes its revenue. 
D)  the consumer faces a different effective wage than the firm.

Question 4

Which of the following relationships does not hold in the one-period model?

Accepted Answer

A)  G=T 
B)  Y=C+G 
C)  Y=zF(K,N) 
D)   =Y-wN-C 
A)  G=T 
B)  Y=C+G 
C)  Y=zF(K,N) 
D)   =Y-wN-C

Question 5

An increase in total factor productivity shifts the PPF

Accepted Answer

A)  upward, but does not change its slope. 
B)  upward, and also changes its slope. 
C)  downward, but does not change its slope. 
D)  downward, and also changes its slope. 
A)  upward, but does not change its slope. 
B)  upward, and also changes its slope. 
C)  downward, but does not change its slope. 
D)  downward, and also changes its slope.

Question 6

Fiscal policy encompasses all of the following except

Accepted Answer

A)  expenditures by the government. 
B)  monetary injection by the government. 
C)  taxation by the government. 
D)  borrowing by the government. 
A)  expenditures by the government. 
B)  monetary injection by the government. 
C)  taxation by the government. 
D)  borrowing by the government.

Question 7

If GDP increases in the model of public goods

Accepted Answer

A)  people are richer, so they need less public goods. 
B)  there is substitution from private goods to public goods. 
C)  if the government provides public goods optimally, public and private goods production both increase. 
D)  all of the increase in GDP goes into public goods. 
A)  people are richer, so they need less public goods. 
B)  there is substitution from private goods to public goods. 
C)  if the government provides public goods optimally, public and private goods production both increase. 
D)  all of the increase in GDP goes into public goods.

Question 8

The second fundamental theorem of welfare economics states that

Accepted Answer

A)  under certain conditions, a competitive equilibrium is Pareto optimal. 
B)  a competitive equilibrium is always Pareto optimal. 
C)  under certain conditions, a Pareto optimum is a competitive equilibrium. 
D)  a Pareto optimum is always a competitive equilibrium. 
A)  under certain conditions, a competitive equilibrium is Pareto optimal. 
B)  a competitive equilibrium is always Pareto optimal. 
C)  under certain conditions, a Pareto optimum is a competitive equilibrium. 
D)  a Pareto optimum is always a competitive equilibrium.

Question 9

Real business cycle theory argues that the primary cause of business cycles is fluctuations in

Accepted Answer

A)  preferences. 
B)  government spending. 
C)  the importance of externalities. 
D)  total factor productivity. 
A)  preferences. 
B)  government spending. 
C)  the importance of externalities. 
D)  total factor productivity.

Question 10

An economy that engages in international trade is called

Accepted Answer

A)  a cooperative economy. 
B)  a modern economy. 
C)  an engaged economy. 
D)  an open economy. 
A)  a cooperative economy. 
B)  a modern economy. 
C)  an engaged economy. 
D)  an open economy.

Points on the production possibilities frontier have the property that they

A competitive equilibrium

A competitive equilibrium fails to be a Pareto Optimum with a distorting tax because

Which of the following relationships does not hold in the one-period model?

An increase in total factor productivity shifts the PPF

Fiscal policy encompasses all of the following except

If GDP increases in the model of public goods

The second fundamental theorem of welfare economics states that

Real business cycle theory argues that the primary cause of business cycles is fluctuations in

An economy that engages in international trade is called

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption-Savings 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

Inflation, the Phillips Curve, and Central Bank Commitment

Filters

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

Points on the production possibilities frontier have the property that they

A competitive equilibrium

A competitive equilibrium fails to be a Pareto Optimum with a distorting tax because

Which of the following relationships does not hold in the one-period model?

An increase in total factor productivity shifts the PPF

Fiscal policy encompasses all of the following except

If GDP increases in the model of public goods

The second fundamental theorem of welfare economics states that

Real business cycle theory argues that the primary cause of business cycles is fluctuations in

An economy that engages in international trade is called

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption-Savings 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

Inflation, the Phillips Curve, and Central Bank Commitment

Filters