1) Real business cycle theories suggest that _____ to correct departures from the desired growth path? a. There is a role for fiscal policy b. There is a role for monetary policy c. There is a role for supply-side policy d. There is a role for stabilizing output ever the business cycle
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2) The impossibility of negative gross investment provides a ______ to fluctuation in ______? a. ceiling, stock building b. ceiling, capital prices c. floor, output d. floor, the capital-output ratio
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3) The multiplier accelerator model assumes ____ depends on ______? a. consumption expected future profits b. investment, interest rates c. investment expected future profits d. stock building interest rates
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4) All of the following are parts of the business cycle except ? a. boom b. slump c. recovery d. acceleration
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5) The business cycle describes fluctuations in output around the? a. trend path of output b. boom c. recession d. short-run fluctuations in output
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6) The neoclassical theory of growth identifier the steady state rate of growth as the ____ just sufficient to keep _____ constant while labor grows? a. saving, investment b. capital per person, productivity c. labor growth, output d. investment capital per person
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7) GDP per head may be an imperfect measure of economic welfare because it excludes ? a. the value of leisure b. Externalities c. Untraded goods d. Change in the distribution of income e. All of the above
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8) Governments can stimulate productivity by ? a. Imposing higher taxes on capital b. encouraging more labour intensive work to reduce unemployment c. reducing spending in education d. encouraging private investment
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9) A combined measure of productivity that takes account of both labor and capital productivity is known as ? a. total exploitation b. labour/capital productivity c. total factor productivity d. total productivity
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10) The belief that the rate of growth depends upon technological progress facilitated by institutions incentives and government is known as ________ growth theory? a. endogenous b. exogenous c. beta d. convergence
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