FREE AND STUDY GAMES ABOUT ECON 3203 EXAM 2

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FREE AND STUDY GAMES ABOUT ECON 3203 EXAM 2

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -110 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: If the production function is y = k^1/2 , the steady-state value of y in the Solow

model with population growth and technological progress is:

Answer:

y = s / ((g) + n + g) Question 2: Economists who believe that monetary policy is more potent than fiscal policy

argue that the:

Answer:

responsiveness of money demand to the interest rate is small.Question 3: The aggregate demand curve generally slopes downward and to the right bc, for any given money supply M, a higher price level P causes a _____ real money supply M/P, which _____ the interest rate and _____ spending.

Answer:

lower; raises; reduces Question 4: The assumption of constant velocity in the quantity equation is the equivalent of the

assumption of a constant:

Answer:

demand for real balances per unit of output

Question 5: A tax cut shifts the _____ curve to the right, and the aggregate demand curve _____.

Answer:

IS; shifts to the right Question 6: All of these are reasons for frictional unemployment EXCEPT:

Answer:

unemployed workers accept the first job offer that they receive.Question 7: When an economy's capital is below the Golden Rule level, reaching the Golden

Rule level:

Answer:

requires initially reducing consumption to increase consumption in the future Question 8: _____ cause(s) the capital stock to rise, while _____ cause(s) the capital stock to fall.

Answer:

Investment; depreciation Question 9: In the Solow model, if the economy starts with more capital per worker than the steady-state level of capital per worker, then the capital per workers will _____ and the output per worker will _____ as the economy approaches steady state.

Answer:

fall; fall Question 10: The IS and LM curves together generally determine:

Answer:

both income and the interest rate Question 11: An increase in the demand for money, at any given income level and level of interest rates, will, within the LS-LM framework, _____ output and _____ interest rates

Answer:

lower; raise

Question 12: All of these are causes of structural unemployment EXCEPT:

Answer:

unemployment insurance Question 13: When an economy begins above the Golden Rule level, reaching the Golden Rule

level:

Answer:

results in higher consumption at all times in the future Question 14: Which of these statements is NOT true about the creation of knowledge and the process of research and development?

Answer:

Knowledge is a private good, that is, rival and excludable Question 15: Assume that the money demand function is (M/P)^d = 2,200-200r, where r is the interest rate in percent. If the price level is fixed at P = 2, and the Fed wants to fix the interest

rate at 7 percent, it should set the money supply at:

Answer:

1600 Question 16: For a fixed money supply, the aggregate demand curve slopes downward because at a lower price level, real money balances are _____, generating a ______ quantity of output demanded.

Answer:

higher; greater Question 17: In the Solow growth model with population growth but no technological progress, when the economy finds itself at the Golden Rule steady state, the marginal product of capital

minus the rate of depreciation will equal:

Answer:

the population growth rate Question 18: If the saving rate of the economy changes to a rate consistent with the golden rule level of capital, then at the new steady state

Answer:

consumption per worker will be higher compared to the original steady state.

Question 19: A difference between the economic long run and the short run is that:

Answer:

demand can affect output and employment in the short run, whereas supply is the ruling force in the long run.Question 20: The LM curve, in the usual case:

Answer:

slopes up to the right Question 21: The steady-state level of capital occurs when the change in the capital stock per

worker (k) equals:

Answer:

Question 22: Over the business cycle, investment spending _____ consumption spending.

Answer:

is more volatile than Question 23: Which of these statements is NOT true about the steady state of the basis Solow model?

Answer:

The marginal product of capital always is equal to the depreciation rate.Question 24: If the IS curve is given by Y = 1,700 - 100r, the money demand function is given by (M/P)^D = Y - 100r, the money supply is 1,000, and the price level is 2, then if the money supply

is raised to 1,200, equilibrium income rises by:

Answer:

50 and the interest rate falls by 0.5 percent Question 25: Any policy aimed at lowering the natural rate of unemployment must either _____ the rate of job separation or _____ the rate of job finding.

Answer:

reduce; increase