Macro Csv.csv - Sheet1

Question 1

To increase the money mulitiplier the fed can

Answer 1

lower the intrest rate on paid reserves

Question 2

If the federal reserve wishes to increase the money supply, it should

Answer 2

decrease the discount rate

Question 3

When the demand for money parameter, k, is large, the velocity of money is ______ and money is changing hands _____.

Answer 3

small; infrequently

Question 4

The oppourntity cost of holding money is the

Answer 4

nominal intrest rate

Question 5

One possible benefit of monderate inflation is

Answer 5

better funtioning labor markets

Question 6

Most economists believe that prices are

Answer 6

flixible in the long run but many are sticky in the short run

Question 7

According to the quanity theory of money, if output is higher, ____ real balances are required, and for fixed M this means ____ P.

Answer 7

higher; lower

Question 8

In the Keynesian -cross model, actual expenditures differ from planned expenditures by the amount of

Answer 8

unplanned inventory investment

Question 9

The government-purchases multiplier indicates how much ___ change(s) in response to a $1 change in government purchases.

Answer 9

income

Question 10

In the keynsian-cross model with a given MPC, the government-expenditure mulitplier ___ the tax mulitplier

Answer 10

is larger than

Question 11

An IS curve shows combinations of

Answer 11

intrest rates and income tht bring equilibrium in the market for goods and services

Question 12

In the IS-LM model, changes in taxes initally affect planned expenditures through:

Answer 12

consumption

Question 13

An increase in the monery supply shirfts the ___ curve to the right, and the aggregate demand curve ___.

Answer 13

LM; shifts to the right

Question 14

Sticky prices

Answer 14

in the short run, some wages and prices are sticky. For studying year to year fluctiations, most macroeconomists believe that price stickyness is a better assumption than price flexibility, magazine publishers tend to change their newsstand prices only every three or four years

Question 15

Okun’s Law is the ____ relationship between real gdp and the ____.

Answer 15

Negative; unemployment rate

Question 16

According to Snowdon and Vane, the keynsian schools of thought are united in the belief that

Answer 16

makets fail sometimes, causing aggreagate economic instability and requiring government intervention.

Question 17

In the relationship expressed in functional form, Y=G(K,L), Y stands for real GDP, K stands for the amount of captial in the economy, and L stnads for the amount of lanor in the economy. In this case G():

Answer 17

is the function telling how the variables in the parentheses determine real GDP.

Question 18

All of the following are measures of GDP :

Answer 18

total of income form all production in the economy, expenditures on all final goods and services produced, value of all final production

Question 19

The production function feature called “constant returns to scale” means that if we:

Answer 19

increase in captial and labor by 10% each, we increase output by 10%

Question 20

When facotr supply is fixed and quanity of the factor is graphed on the horizontal axis while factor price is graphed on the vertical axis, the factor:

Answer 20

supply curve is vertical.

Question 21

Chain-weighted measures of real GDP make use of prices from

Answer 21

a continously changing base year

Question 22

In the solow growth model the savings rate determines the allocation of output between:

Answer 22

investment and consumption

Question 23

In the solow growth model if investment exceeds depreication, the captial stock will ____ and output will ____ until the steady state is attained.

Answer 23

increase; increase

Question 24

A higher rate of savings leads to a

Answer 24

larger captial stock and a higher level of output in the long run

Question 25

IN the solow model, conditional convergence occurs when economies converge to

Answer 25

their own, individual steady states

Question 26

Endogeneous growth theory rejects the assumption of exogenous

Answer 26

technological change

Question 27

Decreasing marginal returns to an input

Answer 27

one of the inputs is fixed and vary the inputs increase by one additional input, output will decrease at a marginal rate.

Question 28

Decreaseing returns to scale

Answer 28

Scale up all of the inputs by the same factor ( mulitply) and see what happens to output.If an output was doubled then its constant returns to scale, if the output was below double then it is decreasing returns to scale