1 |
Using the Keynesian model the effect of an increase in the effective tax rate on capital would be to cause _________ in the real interest rate and ______ in output in the short run. |
A decrease ; a decrease
A decrease ; no change
No change ; a decrease
An increase ; an increase
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2 |
In the Keynesian model in the long run an increase in the money supply will raise |
The price level but not the level of output
The level of output but not the price level
Both the level of output and the price level
Neither the level of output nor the price level
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3 |
In the Keynesian model in the long run a decrease in the money supply will cause ___ in the interest rate and _____ in the price level. |
An increase ; an increase
A decrease ; a decrees
No change ; an increase
No change ; a decrease
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4 |
In the Keynesian model which curve is vertical. |
LRAS
SRAS
AD
NS
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5 |
In the Keynesian model short run equilibrium occurs where |
The IS and LM curves interest
The IS curve LM curve and FE lines intersect
the IS curve intersects the FE line
The LM curve intersects the FE line
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6 |
in the keynesian model in the short run the amount of employment is determined by the effective labor demand curve and the level of. |
Prices
Output
The real interest rate
The supply of labor
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7 |
A model in which individual producers act as price setters because there are only a few sellers and the product they sell is not standardized, is called. |
Imperfect competition
Perfect competition
Monopoly
Monopsony
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8 |
The efficiency wage model can be modified to allow real wages to vary over the business cycle by assuming that. |
Workers effort may depend on the unemployment rate and the real wage
During a recession labor supply will decrease reducing the efficiency wage
During a recession productivity wil fall causing a reduction in the efficiency wage
During a boom labor demand will increase, causing the efficiency wage to rise
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9 |
According to the efficiency wage model during a recession firms will not reduce real wages because. |
Unions would go on strike reducing profitability
This would reduce worker effort and productivity.
The equilibrium real wage has increased
Legally, they can't
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10 |
In the efficiency wage model if the real wage is higher than the market clearing wage so that there in an excess supply of labor. |
Firms will hire new workers at lower wages
Firms will replace high paid workers with low paid formerly unemployed workers
Employers will not hire workers who are willing to work for a lower wage.
Firms will demand a higher level of effort from existing employees
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11 |
In the efficiency wage model with the efficiency wage above the market clearing wage when employment is at its full employment level. |
Labor supply equals labor demand
There is an excess supply of labor
there is an excess demand for labor
There could be either an excess demand for or an excess supply of labor
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12 |
The gift exchange motive suggests that |
Workers value benefits like health insurance more than job security
Workers prefer a nice work environment even if they must accept lower wages.
Workers who feel well treated will work harder and more efficiently
Workers will shirk if they are paid a low wage
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13 |
For a borrower an increase in the real interest rate will lead to. |
Higher current consumption and less borrowing
Higher current consumption and less saving
Lower current consumption and less borrowing
Lower current consumption and less saving
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14 |
The substitution effect of a decrease in real interest rates is to cause a consumer to. |
Increase future consumption and decrease current consumption
Decrease future consumption and increase current consumption
Increase current consumption and increase saving
Decrease current consumption and increase saving.
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15 |
Suppose the government provides a tax cut today that is matched by a tax increase in the future that's equal in present value to the tax cut This causes a consumer's saving to. |
Decrease
Increase
Remain unchanged
Increase if the person was a lender and decrease if the person was a borrower
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16 |
A temporary decrease in government purchases would cause. |
A rightward shift in the saving curve and a leftward shift in the investment curve
A rightward shift in the saving curve and a rightwards shift in the investment curve.
A right ward shift in the saving curve but no shift in the investment curve
No shift in the saving curve but a left ward shift in the investment curve.
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17 |
An increase in the expected real interest rate tends to. |
Raise desired saving only
Raise desired investment only
Raise both desired savings and desired investment
Raise desired savings, but lower desired investment.
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18 |
When desired national saving equals desired national investment what market is in equilibrium. |
The goods market
The money market
The foreign exchange market
The stock market
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19 |
Suppose your company is in equilibrium will its capital stock at its desired level A permanent increase in the depreciation rate now has what effect on your desired capital stock. i |
Raises it because the future marginal productivity of capital is higher
Lowers it because the future marginal productivity of capital is lower
Raises it because the user cost of capital is now lower
Lowers it beacause the user cost of capital is now higher
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20 |
Suppose your company is in equilibrium with its capital stock at the desired level A permanent decline in the expected real interest rate now has what effect on your desired capital stock |
Raises it because the future marginal productivity of capital is higher
Lowers it because the future marginal productivity of capital is lower
Raises it because the user cost of capital is now lower
Lowers it because the user cost of capital is now higher
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