practicequestions6fall2004

practicequestions6fall2004 - Econ 102 Fall 2004 Practice...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Fall 2004 Practice Questions 6 Readings: Chapter 7: The Classical Long-Run Model Concepts: Aggregate Production Function Disposable Income Government Budget Fiscal Policy Crowding out Leakages and Injections Loanable funds Labor supply and demand I. True/False and explain 1) The classical model is a macroeconomic model that tries to explain both short-run and long run behavior of the economy. 2) The classical model focuses primarily on explaining both real and nominal values. 3) One of the assumptions of the classical model is that the labor market and the loanable funds market are always in equilibrium. 4) The Keynesian model was developed to explain fluctuations around the long-run trend, while the classical model is used to explain the long-run trend itself. 5) Market clearing is a reasonable assumption in the short-run. 6) According to the classical view, the economy needs the government’s help in achieving full employment. 7) In the labor market, like any other market for goods and services, households are on the demand side and firms are on the supply side. 8) In the classical model there is no structural unemployment. 9) The aggregate production function displays the relationship between total employment and total output in the economy using different amount of resources. 10) The aggregate production function displays increasing returns to labor because it is upward sloping. 11) Say’s law assures us that leakages will always equal injections in an economy.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/08/2008 for the course ECON 102 taught by Professor Drozd during the Spring '08 term at University of Wisconsin.

Page1 / 4

practicequestions6fall2004 - Econ 102 Fall 2004 Practice...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online