MCQ_9_11 - Fall 2007 Ionescu Intermediate Macroeconomics...

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Fall 2007 - Ionescu Intermediate Macroeconomics Chapters 9-11 Self-check questions 1 Chapter 9 1. The condition, MRS l 0 ,c 0 = w 0 describes the representative consumer’s (a) investment decision. (b) consumption / savings decision. (c) current period work ˆ a leisure decision. (d) future period work / leisure decision. 2. An increase in lifetime wealth is likely to (a) increase current labor supply and increase current con- sumption demand. (b) increase current labor supply and decrease current consumption demand. (c) decrease current labor supply and increase current consumption demand. (d) decrease current labor supply and decrease current consumption demand. 3. Any increase in the present value of taxes for the consumer implies (a) an increase in lifetime wealth and an increase in current labor supply. (b) an increase in lifetime wealth and a decrease in current labor supply. (c) a decrease in lifetime wealth and an increase in current labor supply. (d) a decrease in lifetime wealth and a decrease in current labor supply. 4. The demand for current consumption, as plotted against current income, shifts to the right due to all of the following except (a) a decrease in current taxes. (b) a decrease in future taxes. (c) an increase in current income. (d) an increase in future income. 5. When drawn against the real interest rate, the optimal investment schedule shifts to the right if (a) current total factor productivity z increases. (b) current total factor productivity z decreases. (c) future total factor productivity zˆ a increases. (d) future total factor productivity z’ decreases. 6. When drawn against current income, the slope of the C d ( r ) + I d ( r ) + G curve is equal to the marginal (a) product of capital. (b) product of labor. (c) propensity to consume. (d) propensity to save. 7. The equilibrium effects of an anticipated increase in future government spending include (a) an increase in the real wage and an increase in the real interest rate. (b) an increase in the real wage and a decrease in the real interest rate. (c) a decrease in the real wage and an increase in the real interest rate. (d) a decrease in the real wage and a decrease in the real interest rate.
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