Macroeconomics 9th Edition

Net capital outflow is equal to the amount that: A) foreign investors lend here. B) domestic investors lend abroad. C) foreign investors lend here minus the amount domestic investors lend abroad. D) domestic investors lend abroad minus the amount that foreign investors lend here. Answer: D Answer: D Answer: D When a firm sells a product out

The neoclassical theory of distribution explains the allocation of: A) output between goods and services. B) output among consumption, investment, and government spending. C) income among factors of production. D) income between saving and investment. Answer: C Answer: C Answer: C To the extent that low interest rates contributed to the financial crisis of 2008"2009, the blame

The index of leading indicators compiled by the Conference Board includes 10 data series that are used to forecast economic activity about ______ in advance. A) one month B) six to nine months C) one to two years D) five to ten years Answer: B Answer: B Answer: B The Solow model shows that a key determinant

Holding other factors constant, a decline in the real interest rate will ______ the price of housing and ______ the flow of residential housing investment. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease Answer: A Answer: A Answer: A Which of the following is an example of moral hazard? A) The healthiest people buy life

In the classical model with fixed income, a reduction in the government budget deficit will lead to a: A) higher real interest rate. B) lower real interest rate. C) higher level of output. D) lower level of output. Answer: B Answer: B Answer: B Economic booms should stimulate investment spending because during booms: A) the real interest rate

Risk aversion is a dislike of: A) paying interest. B) lending. C) borrowing. D) randomness in economic circumstances. Answer: D Answer: D Answer: D The balanced growth property of the Solow growth model with population growth and technological progress predicts which of the following sets of variables will grow at the same rate in the steady state? A) output

According to the Phillips curve, other things being equal, inflation depends positively on: A) expected inflation. B) the unemployment rate. C) the rate of technological change. D) the quantities of capital and labor. Answer: A Answer: A Answer: A An increase in income raises money ______ and ______ the equilibrium interest rate. A) demand; raises B) demand; lowers C) supply;

Other things being equal, the ratio of Tobin's q will rise if: A) stock prices fall. B) the replacement cost of capital rises. C) more capital is installed. D) stock prices rise. Answer: D Answer: D Answer: D When the central bank lowers its target inflation rate, it _____ the nominal and real interest rate, which shifts

Each of the following conditions will tend to reduce the sacrifice ratio except when: A) workers and firms set wages and prices based on rational expectations. B) policymakers make credible commitments to policy changes. C) announcements of policy changes are made before workers and firms have formed expectations. D) the concept of hysteresis

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $0.50 in 2009. If 10 apples and 5 oranges were purchased in 2002, and 5 apples and 10 oranges were purchased in 2009, the CPI for 2009, using 2002 as the base year, is: A)

An estimate of what government spending and tax revenue would be if the economy were operating at its natural rate of output and employment is called the ______ budget. A) cyclically adjusted B) inflation-adjusted C) capital-asset D) generational accounting Answer: A Answer: A Answer: A Assume that the consumption function is given by C = 200 +

People use money as a medium of exchange when they: A) hold money to transfer purchasing power into the future. B) use money as a measure of economic transactions. C) use money to buy goods and services. D) hold money to gain power and esteem. Answer: C Answer: C Answer: C The dynamic aggregate demand curve will shift

Inventory investment will decrease when interest rates _____ and credit conditions are _____. A) decrease; tight B) decrease; easy C) increase; easy D) increase; tight Answer: D Answer: D Answer: D If the short-run aggregate supply curve is assumed to be horizontal and international capital flows are infinitely elastic, then the mother of all models in the

Falling house prices generate widespread insolvency of financial institutions by: A) reducing the value of collateral assets. B) reducing the value of liabilities. C) increasing the value of assets. D) increasing capital. Answer: A Answer: A Answer: A If real money balances enter the IS"LM model both through the theory of liquidity preference and the Pigou effect,

The underground economy: A) is included in the latest GDP accounts. B) includes only illegal activities. C) includes domestic workers for whom Social Security tax is not collected. D) excludes the illegal drug trade. Answer: C Answer: C Answer: C In the IS"LM model when M/P rises, in short-run equilibrium, in the usual case the interest rate ______

The number of households interviewed in the monthly employment survey of the U.S. Bureau of Labor Statistics is approximately: A) 6,000. B) 60,000. C) 600,000. D) 6 million. Answer: B Answer: B Answer: B A capital rental firm makes a profit if the ______ is ______ the cost of capital. A) real rental price of capital; less than B)

Policy is conducted by rule if policymakers: A) announce in advance how policy will respond to various situations and commit themselves to following through on this announcement. B) are free to size up the situation case by case and choose whatever policy seems appropriate at the time. C) set policy according to election

The natural rate of unemployment in the United States since 1950 has averaged between ______ and ______ percent. A) 0; 1 B) 1; 3 C) 5; 6 D) 10; 15 Answer: C Answer: C Answer: C The simple investment function shows that investment ______ as ______ increases. A) decreases; the interest rate B) increases; the interest rate C) decreases; government

A fixed-weight price index like the CPI ______ the change in the cost of living because it ______ take into account that people can substitute less expensive goods for ones that have become more expensive. A) underestimates; does not B) overestimates; does C) accurately estimates; does D) overestimates; does not Answer: D Answer: D Answer: D If the interest

Economists call the changes in the composition of demand among industries and regions: A) insider-outsider conflicts. B) sectoral shifts. C) moral hazard. D) adverse selection. Answer: B Answer: B Answer: B The public policy implication of Goldin and Katz's analysis of growing income inequality is that reversing this trend will require that more of society's resources be

The IS curve plots the relationship between the interest rate and ______ that arises in the market for ______. A) national income; goods and services B) the price level; goods and services C) national income; money D) the price level; money Answer: A Answer: A Answer: A All of the following are important macroeconomic variablesexcept: A) real

In a small open economy with a floating exchange rate, the supply of real money balances is fixed and a rise in government spending: A) raises the interest rate, so that income must rise to maintain equilibrium in the money market. B) raises the interest rate so that net exports must fall

According to the traditional view of government debt (as in the Mundell"Fleming model), if taxes are cut without cutting government spending, then the short-run effects are a(n) ______ of the dollar and a(n) ______ in net exports. A) appreciation; increase B) appreciation; decrease C) depreciation; increase D) depreciation; decrease Answer: B Answer: B Answer: B According to

Some economists have advocated replacing government deposit insurance with 100-percent- reserve banking. Under this plan, banks would hold all deposits as reserves. Deposit insurance would no longer be necessary, because banks would always have the reserves to meet customer withdrawals. a. What would happen to the money supply (defined as currency and

According to the permanent-income hypothesis, consumption depends primarily on ______ income. A) current B) nominal C) permanent D) transitory Answer: C Answer: C Answer: C To make a trade in a barter economy requires: A) currency. B) a check. C) scrip. D) a double coincidence of wants. Answer: D Answer: D Answer: D According to the Fisher effect, the nominal interest rate moves one-for-one

Assume that a firm wants to build a factory that will cost $5 million. It believes that it can get a return of $600,000 in one year and then can sell the used factory for its original cost. The rate of return on this investment would be: A) 6 percent. B) 12

Alan Blinder's survey of firms found that the typical firm adjusts its prices: A) more than once a week. B) about once a month. C) once or twice a year. D) less than once a year. Answer: C Answer: C Answer: C The tax multiplier indicates how much ______ change(s) in response to a $1 change in taxes. A)

According to the Keynesian-cross analysis, when there is a shift upward in the government-purchases schedule by an amount DG and the planned expenditure schedule by an equal amount, then equilibrium income rises by: A) one unit. B) DG. C) DG divided by the quantity one minus the marginal propensity to consume. D) DG

If MPC = 0.75 (and there are no income taxes but only lump-sum taxes) when T decreases by 100, then the IS curve for any given interest rate shifts to the right by: A) 100. B) 200. C) 300. D) 400. Answer: C Answer: C Answer: C Using a market-clearing model to analyze the demand for haircuts

The consumption decisions of individuals are not important for the: A) determination of the steady-state capital stock. B) determination of fiscal-policy multipliers. C) determination of aggregate demand. D) determination of sticky prices. Answer: D Answer: D Answer: D Beginning at long-run equilibrium in the dynamic model of aggregate demand and aggregate supply, in the first period of

Nominal GDP measures the value of goods and services in ______ prices, while real GDP measures the value of goods and services in ______ prices. A) foreign; domestic B) domestic; foreign C) current; constant D) constant; current Answer: C Answer: C Answer: C All of the following are causes of structural unemployment except: A) minimum-wage laws. B) the

Measuring the rate of inflation using a market basket that excludes food and energy prices is preferred by some analysts because this measure, called core inflation, A) provides a real, rather than a nominal, rate of inflation. B) gives a better measure of ongoing, sustained price changes. C) is more consistent with measures

In a small open economy with a floating exchange rate, if the government imposes a tariff on foreign goods, then in the new short-run equilibrium: A) imports will decrease while exports remain constant, leading to a rise in net exports. B) imports will decrease and exports will increase, leading to a rise

The real interest rate is the: A) rate of interest actually paid by consumers. B) rate of interest actually paid by banks. C) rate of inflation minus the nominal interest rate. D) nominal interest rate minus the rate of inflation. Answer: D Answer: D Answer: D Money market mutual fund shares are included in: A) M1 only. B)

Which of the following is not a proposed explanation for that fact that Americans on average work 20 percent more hours than the typical resident of western Europe? A) Europeans have more taste for leisure than Americans. B) Americans have a lower unionization rate than Europeans. C) Europeans face higher tax rates than

Holding other factors constant, legislation to cut taxes in an open economy will: A) increase national saving and lead to a trade surplus. B) increase national saving and lead to a trade deficit. C) reduce national saving and lead to a trade surplus. D) reduce national saving and lead to a trade deficit. Answer:

Measuring the size of government debt is complicated by all of the following factors except: A) inflation. B) uncounted liabilities. C) capital assets of the government. D) failure of the Office of Management and Budget to disclose figures on capital expenditures and credit programs. Answer: D Answer: D Answer: D Public saving is: A) always positive. B) always

According to the Solow model, persistently rising living standards can only be explained by: A) population growth. B) capital accumulation. C) saving rates. D) technological progress. Answer: D Answer: D Answer: D Exhibit: Risk Premium (Exhibit: Risk Premium) A small open economy with a floating exchange rate is initially in equilibrium at A with If there is an increase

In the short run, a favorable supply shock causes: A) both prices and output to rise. B) prices to rise and output to fall. C) prices to fall and output to rise. D) both prices and output to fall. Answer: C Answer: C Answer: C According to the theory of liquidity preference, tightening the money supply will

The inventories of a company that manufactures snow blowers increase in the summer and decline in the winter. This example is most consistent with which of the following explanations for holding inventories? A) production smoothing B) inventories as factors of production C) stock-out avoidance D) work in process Answer: A Answer: A Answer: A Credit cards: A) are

An illiquid bank can become insolvent when it: A) refuses to make promised payments. B) sells additional stock to obtain funds. C) sells assets at fire-sale prices to meet liquidity demands. D) can extend the due dates of its liabilities. Answer: C Answer: C Answer: C In the circular flow diagram, firms receive revenue from the _____ market,

Two interpretations of the IS"LM model are that the model explains: A) the determination of income in the short run when prices are fixed, or what shifts the aggregate demand curve. B) the short-run quantity theory of income, or the short-run Fisher effect. C) the determination of investment and saving, or what shifts the

Other things being equal, all of the following government policies are likely to increase national saving except: A) decreasing taxes on savings accounts. B) running a budget deficit. C) running a budget surplus. D) retiring part of the national debt. Answer: B Answer: B Answer: B Exhibit: IS"LM to Aggregate Demand (Exhibit: IS"LM to Aggregate Demand) Based on the

Explain what type of wage rigidity is most likely to affect the unemployment rates of the following types of workers: a. workers with low marginal labor productivity, b. workers in the construction trades, such as plumbers and electricians, c. workers engaged in creative work that is not easily monitored. Answer: a. minimum wageb.

Banks help mitigate the problem of adverse selection in lending by: A) developing expertise in evaluating the business prospects of loan applicants. B) making loans to many different types of borrowers. C) adjusting the amount of the loan to fit the requirements of the borrower. D) monitoring the business after a loan is made

In 2007 in the United States among labor-force members ages 16 to 19, the highest unemployment rate was for: A) black females. B) black males. C) white females. D) white males. Answer: B Answer: B Answer: B Tax cuts stimulate ______ by improving workers' incentive and expand ______ by raising households' disposable income. A) velocity; demand for loanable

Along an aggregate demand curve, which of the following are held constant? A) real output and prices B) nominal output and velocity C) the money supply and real output D) the money supply and velocity Answer: D Answer: D Answer: D In a small open economy, if exports equal $20 billion, imports equal $30 billion, and domestic

A period of falling prices is called: A) deflation. B) inflation. C) a depression. D) a recession. Answer: A Answer: A Answer: A With planned expenditure and the equilibrium condition Y = PE drawn on a graph with income along the horizontal axis, if income exceeds expenditure, then income is to the ______ of equilibrium income and there

Conventional monetary and fiscal policies used in a recession are aimed at: A) increasing aggregate supply. B) increasing aggregate demand. C) decreasing aggregate supply. D) decreasing aggregate demand Answer: B Answer: B Answer: B The outside lag is the time: A) before automatic stabilizers respond to economic activity. B) when automatic stabilizers are not effective. C) between a shock to

If the nominal exchange rate falls 10 percent, the domestic price level rises 4 percent, and the foreign price level rises 6 percent, the real exchange rate will fall: A) 0 percent. B) 8 percent. C) 10 percent. D) 12 percent. Answer: B Answer: B Answer: B Macroeconomists call assets used to make transactions: A) real income. B) nominal

Monetary neutrality, the irrelevance of the money supply in determining values of _____ variables, is generally thought to be a property of the economy in the long run. A) real B) nominal C) real and nominal D) neither real nor nominal Answer: A Answer: A Answer: A In the classical model with fixed income, if the interest

In the dynamic model of aggregate demand and aggregate supply, one period in time is connected to the next period through: A) the monetary policy rule. B) demand shocks. C) inflation expectation. D) the natural level of output. Answer: C Answer: C Answer: C Fiscal policy has a relatively long ______ lag, and monetary policy has a relatively

If the long-run aggregate supply curve is vertical, then changes in aggregate demand affect: A) neither prices nor level of output. B) both prices and level of output. C) level of output but not prices. D) prices but not level of output. Answer: D Answer: D Answer: D In a short-run model of a large open economy,

Chapter 1 presents a brief introduction to macroeconomics. The chapter explains the type of questions macroeconomists address, introduces the concept of an economic model, and discusses the role of price flexibility and price stickiness in macroeconomic models. Chapter 1 presents a brief introduction to macroeconomics. The chapter explains the type

1. To emphasize that prices are flexible in the long run but may be sticky in the short run and to show that sticky prices play an important role in models of economic fluctuations. 1. To emphasize that prices are flexible in the long run but may be sticky in

Further evidence of price rigidity comes from a study by the economist Dennis Carlton, on the basis of a data set on individual transactions of intermediate products used in manufacturing between 1957 and Further evidence of price rigidity comes from a study by the economist Dennis Carlton, on the basis

Chapter 11 introduces students to the ISLM model. The chapter is taken up principally with the derivation of the IS and LM curves, prior to the use of the model in Chapter 12. Chapter 11 introduces students to the ISLM model. The chapter is taken up principally with the derivation

Chapter Summary This chapter uses the ISLM model to show the short-run effects of fiscal and monetary policies on output and the interest rate when prices are fixed. It also explains how the ISLM model provides a theory of aggregate demand. It applies the model to study the Great Depression.

299 exceed world interest rates. This means that foreigners want to hold U.S. assets. This, in turn, increases the demand for U.S. dollars, bidding up the exchange rate, reducing net exports, and causing the IS curve to shift in. The opposite occurs if the domestic interest rate is too low.

6. The goals of this chapter are as follows: 6. The goals of this chapter are as follows: 6. The goals of this chapter are as follows: 2. To show how the short-run effects of monetary and fiscal policy depend crucially upon the exchange-rate regime. 2. To show how the

328 Barro tried to separate out those changes in the money supply that were predictable, and hence could have been anticipated, from those changes that were unpredictable. That is, he supposed that individuals used past values of the money supply and other variables to predict future values of the money

based on imperfections in goods markets that involve sticky prices or incomplete information. The second part moves from aggregate supply to the Phillips curve and uses this as a tool for discussing policy questions such as the costs of disinflation. based on imperfections in goods markets that involve sticky prices

then applying statistical and econometric techniques to see whether the data are consistent with the theory. The approach of real business cycle theorists, however, has usually been to simulate the outcomes of their models and to compare those simulations with actual data. A simple illustration has been provided by the

343 policy may have been too expansionary in the early to mid-2000s, during the time when real estate prices began to rise sharply. 343 policy may have been too expansionary in the early to mid-2000s, during the time when real estate prices began to rise sharply. 343 policy may have

economics; it provides a good illustration of the productive interplay of theory and data. The primary motivation of the chapter is the puzzle of the difference between the short-run (cross-section) and long-run (time series) consumption function. The biggest difficulty in presenting this material is that the theory of intertemporal choice

410 move together, since it shows that the interest rate on a long bond is simply an average of the interest rates on short bonds. The expectations theory does not explain another fact about the term structure, however: Long bonds generally have a higher return than short bonds. According to

17-1 The Short Run and the Long Run: Investment and the Capital Stock 17-1 The Short Run and the Long Run: Investment and the Capital Stock 17-1 The Short Run and the Long Run: Investment and the Capital Stock 17-4 Asset Pricing III: Bond Prices and the Term Structure of

439 439 439 Suppose youre an economics professor whos busy writing a paper to be presented in three days. Someone phones you for your forecast of next quarters interest rate on three-month Treasury bills. Because youre paid for writing papers, not making forecasts (and because youre very busy), you quickly

doing no harm? And second, should policymakers commit to a rule or make policy decisions on a case-by-case basis? Accordingly, the chapter frames its discussion around debates over active versus passive policy, and over rules versus discretion. doing no harm? And second, should policymakers commit to a rule or make

measure of what the deficit would be if the economy were at the potential level of output, and the cyclical deficit is the difference between the actual and the structural. This distinction sheds particular light on the experience of the U.S. economy in the 1980s. The increase in the deficit

19-1 Debt and Deficits: The Data 19-1 Debt and Deficits: The Data 19-1 Debt and Deficits: The Data 19-4 Generational Accounting 19-4 Generational Accounting 19-4 Generational Accounting 453 453 453 three sections concentrate on the effects of the government debt on the economy, looking at the effects through the traditional

32 CASE STUDY EXTENSION 2-4 The Components of GDP Table 1 and Figure 1 show the principal components of GDP between 1929 and 2013. Table 1 U.S. Nominal GDP and the Components of Expenditure: 19292013 (billions of dollars) Year GDP Consumption Investment Government Purchases Net Exports 1929 104.6

2-1 Measuring Output 2-1 Measuring Output 2-1 Measuring Output 2-3 Chain-Weighted Real GDP 2-3 Chain-Weighted Real GDP 2-3 Chain-Weighted Real GDP 2-5 Defining National Income (Case Study) 2-5 Defining National Income (Case Study) 2-5 Defining National Income (Case Study) 15 15 15 consumer price index, and the unemployment rate. This

are more likely to use internal finance to fund projects. And certain industries are just technologically more (or less) likely to need outside finance. For example, drug companies require large amounts of funding to bring products to market, but tobacco companies do not. Countries with well-developed financial systems are therefore

477 477 477 instructor. The analysis of how financial markets can enhance an economys long-run growth provides the opportunity for drawing connections with the models of economic growth presented in Chapters 8 and 9. Some instructors may find it useful to review quickly the standard Solow growth model when teaching

Source: Constructed by Charles Bean from data in B.R. Mitchell, British Historical Statistics (Cambridge, MA: Cambridge University Press, 1988). Source: Constructed by Charles Bean from data in B.R. Mitchell, British Historical Statistics (Cambridge, MA: Cambridge University Press, 1988). Source: Constructed by Charles Bean from data in B.R. Mitchell, British

throughout the book, such as the production function, the consumption function, and the investment function. throughout the book, such as the production function, the consumption function, and the investment function. throughout the book, such as the production function, the consumption function, and the investment function. (c) What determines how GDP

4-1 Money as a Medium of Exchange: The Search Model 4-1 Money as a Medium of Exchange: The Search Model 4-1 Money as a Medium of Exchange: The Search Model 4-3 More on Credit Cards 4-3 More on Credit Cards 4-3 More on Credit Cards 4-5 Checks Without Banks: The

inflation. Fama tested this idea using data from 1953 to 1971. The idea of his tests was that if the nominal interest rate is indeed the best predictor of the inflation rate, no other information should help to predict the inflation rate. In particular, past values of the inflation rate

1. How the supply of and demand for money determine the average level of prices; 1. How the supply of and demand for money determine the average level of prices; 1. How the supply of and demand for money determine the average level of prices; 5-1 The Velocity of Money

1. To acquaint students with the terminology necessary for understanding the open economy. 1. To acquaint students with the terminology necessary for understanding the open economy. 1. To acquaint students with the terminology necessary for understanding the open economy. 3. To present a simple model of the real exchange rate,

Martin Feldstein and Charles Horioka made a somewhat surprising discovery in the face of this theory: There is a close correspondence between saving and investment in many countries.1 Figure 1 illustrates the Feldstein Horioka finding: It shows a scatterplot of domestic saving and domestic investment, each expressed as a percentage

that the rate of unemployment is determined by the rates of job separation and job finding. that the rate of unemployment is determined by the rates of job separation and job finding. that the rate of unemployment is determined by the rates of job separation and job finding. 3. To

drives up the wage it must pay and so has an incentive to hire fewer workers and thus pay a lower wage than would prevail under perfect competition. In the presence of a minimum wage, the monopsonist firm must pay a higher wage anyway and so will find it optimal

193 193 193 The Solow growth model explains why this is a source of such concern. A lower saving rate translates, in the long run, into a lower capitallabor ratio and hence lower output per capita. Decreased saving permits increased consumption

rate lead to temporarily higher growth and a permanently higher level of capital and output. rate lead to temporarily higher growth and a permanently higher level of capital and output. rate lead to temporarily higher growth and a permanently higher level of capital and output. 2. Because the U.S. economy

the Mideast was the richest region, with income nearly 40 percent above the national average, while the Southeast was the poorest region, with income just above 50 percent of the national average. By the end of the 20th century, the gap between the richest and poorest regions had narrowed considerably,

difficult. Since they are analytically identical, the main problem apparently comes in understanding what we mean by effective worker. Supplement 3-2, What is Capital, which discusses human capital, may be helpful; see also the intuitive presentation in Supplement 9-7, The Solow Growth Model: An Intuitive ApproachPart Two. difficult. Since they

In the classical model with fixed income a decrease in the real interest rate could be the result of a(n): A) increase in government spending. B) increase in desired investment. C) increase in taxes. D) decrease in taxes. Answer: C Answer: C Answer: C The factor that makes national saving equal investment, in equilibrium, is: A) the interest

In the Solow growth model of an economy with population growth but no technological change, the break-even level of investment must do all of the following except: A) offset the depreciation of existing capital. B) provide capital for new workers. C) equal the marginal productivity of capital (MPK). D) keep the level of capital

Starting from long-run equilibrium in the dynamic model of aggregate demand and aggregate supply, a temporary five-period tax increase causes output to _____ until returning to the natural level in the long run. A) remain continuously above the natural level of output B) move above and then below the natural level of

The most prominent feature of the U.S. economy in the 1970s was: A) cost-push deflation. B) cost-push inflation. C) demand deflation. D) demand inflation. Answer: B Answer: B Answer: B Financial intermediation is the process of: A) settling disputes between borrowers and lenders. B) advising corporations on whether to expand using debt or equity. C) transferring funds from savers to

People use money as a unit of account when they: A) hold money to transfer purchasing power into the future. B) use money as a measure of economic transactions. C) use money to buy goods and services. D) hold money to gain power and esteem. Answer: B Answer: B Answer: B Efficiency-wage theories suggest that a firm

Economic research shows that ______ in explaining international differences in living standards. A) physical capital is more important than human capital B) human capital is at least as important as physical capital C) human capital is much more important than physical capital D) infrastructure is the most important factor Answer: B Answer: B Answer: B The Taylor

According to the classical dichotomy, when the money supply decreases, _____ will decrease. A) real GDP B) consumption spending C) the price level D) investment spending Answer: C Answer: C Answer: C If there is a fixed-exchange-rate system, then in the long run: A) the nominal exchange rate is fixed, but the real exchange rate is free to

Between 1880 and 1896, the price level in the United States fell 23 percent. This movement was ______ for bankers of the Northeast and ______ for farmers of the South and West. A) bad; bad B) good; good C) good; bad D) bad; good Answer: C Answer: C Answer: C In the Solow growth model, the steady-state

In instances of hyperinflation, the delays involved in collecting taxes often result in: A) decreased real government tax revenue. B) large capital gains for creditors. C) higher shoeleather costs of inflation. D) higher ex ante real interest rates. Answer: A Answer: A Answer: A Assume that GDP (Y) is 6,000. Consumption (C). is given by the equation

An oil cartel effectively increases the price of oil by 100 percent, leading to an adverse supply shock in both Country A and Country B. Both countries were in long-run equilibrium at the same level of output and prices at the time of the shock. The central bank of Country