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1 | |
Economists disagree over the following except __________ and
the speed at which the labour market clears |
|
| | A) | how expectations are formed |
| | B) | the composition of aggregate demand |
| | C) | the possibility of hysteresis |
| | D) | the relative importance of the short run and long run |
|
2 | |
An economist who believed that markets clear almost instantaneously would be regarded as ______________ |
|
| | A) | a Keynesian |
| | B) | a gradual monetarist |
| | C) | a new Keynesian |
| | D) | a new classical macroeconomist |
|
3 | |
New classical macroeconomists advocate that policy should __________ and __________ |
|
| | A) | pursue price stability, supply-side policies |
| | B) | dampen the business cycle, use fiscal stimulus |
| | C) | reduce interest rates, expansionary monetary policy |
| | D) | reduce inequality, erect trade barriers |
|
4 | |
Real business cycle theorists argue that ____________ can explain short and long term fluctuations in output |
|
| | A) | imperfect labour markets |
| | B) | rational expectations |
| | C) | intertemporal decisions of households, firms and government |
| | D) | sun spot cycles |
|
5 | |
If an economist suggested that government should concentrate on, long-run policies to keep inflation down and supply-side policies to raise potential output, this economist could be described as a __________ |
|
| | A) | moderate Keynesian |
| | B) | gradualist monetarist |
| | C) | new Keynesian |
| | D) | extreme Keynesian |
|
6 | |
A moderate Keynesian would not advocate ____________ |
|
| | A) | stabilisation policies |
| | B) | supply-side policies |
| | C) | government intervention |
| | D) | non-intervention |
|
7 | |
New Keynesians claim that market failure results from _________ and ___________ |
|
| | A) | information problems, externalities |
| | B) | barriers to entry, public goods |
| | C) | the free rider problem, merit goods |
| | D) | public goods, merit goods |
|
8 | |
Extreme Keynesians believe that when the economy is in recession |
|
| | A) | unemployment will not last long |
| | B) | unemployment will cause the real wage to fall |
| | C) | aggregate demand will always respond to lower interest rates |
| | D) | the government should use expansionary fiscal and monetary policy to raise potential output |
|
9 | |
New classical macroeconomists believe that government should fine-tune aggregate demand |
|
| | A) | TRUE |
| | B) | FALSE |
|
10 | |
Gradualist monetarists advocate demand management by fiscal fine tuning |
|
| | A) | TRUE |
| | B) | FALSE |
|
11 | |
New Keynesians provide macroeconomic foundations for Keynesian macroeconomics |
|
| | A) | TRUE |
| | B) | FALSE |
|
12 | |
Keynesian unemployment causes a fall in the real wage |
|
| | A) | TRUE |
| | B) | FALSE |
2002 A McGraw-Hill Online Learning Centre