Question 1

According to real business cycle theorists, negative shocks cause recessions, and positive shocks cause expansion.

Accepted Answer

A) True 
 B)False

Question 2

When the crowding-out effect of a decrease in taxes is included in the analysis:

Accepted Answer

A) AD shifts left. 
B) AD doesn't change. 
C) AD shifts right. 
D) any change in AD is indeterminate. 
A) AD shifts left. 
B) AD doesn't change. 
C) AD shifts right. 
D) any change in AD is indeterminate.

Question 3

Which of the following is a government sponsored enterprise that funds or guarantees a substantial number of mortgage loans in the U.S.?

Accepted Answer

A) Fannie Mae 
B) Freddie Mac 
C) both Fannie Mae and Freddie Mac 
D) neither Fannie Mae nor Freddie Mac 
A) Fannie Mae 
B) Freddie Mac 
C) both Fannie Mae and Freddie Mac 
D) neither Fannie Mae nor Freddie Mac

Question 4

A larger crowding-out effect:

Accepted Answer

A) increases the magnitude of a given fiscal policy's effect on AD and increases the magnitude of its effects on investment. 
B) increases the magnitude of a given fiscal policy's effect on AD and decreases the magnitude of its effects on investment. 
C) decreases the magnitude of a given fiscal policy's effect on AD and increases the magnitude of its effects on investment. 
D) decreases the magnitude of a given fiscal policy's effect on AD and decreases the magnitude of its effects on investment. 
A) increases the magnitude of a given fiscal policy's effect on AD and increases the magnitude of its effects on investment. 
B) increases the magnitude of a given fiscal policy's effect on AD and decreases the magnitude of its effects on investment. 
C) decreases the magnitude of a given fiscal policy's effect on AD and increases the magnitude of its effects on investment. 
D) decreases the magnitude of a given fiscal policy's effect on AD and decreases the magnitude of its effects on investment.

Question 5

What do rational expectations believe? What is their critics' point of view?

Accepted Answer

Rational expectation economists believe

According to real business cycle theorists, negative shocks cause recessions, and positive shocks cause expansion.

When the crowding-out effect of a decrease in taxes is included in the analysis:

Which of the following is a government sponsored enterprise that funds or guarantees a substantial number of mortgage loans in the U.S.?

A larger crowding-out effect:

What do rational expectations believe? What is their critics' point of view?

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

International Economics

Filters

Exam 17: Issues in Macroeconomic Theory and Policy

According to real business cycle theorists, negative shocks cause recessions, and positive shocks cause expansion.

When the crowding-out effect of a decrease in taxes is included in the analysis:

Which of the following is a government sponsored enterprise that funds or guarantees a substantial number of mortgage loans in the U.S.?

A larger crowding-out effect:

What do rational expectations believe? What is their critics' point of view?

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

International Economics

Filters