{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Review questions - Keynesian economy

Review questions - Keynesian economy - Review questions...

Info icon This preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
    Review questions
Image of page 1

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

View Full Document Right Arrow Icon
    Which of the following policy options would  simultaneously increase interest rates and decrease  output? A. The Federal Reserve Board sells bonds through open market operations. B. The federal government increases its defense purchases. C. The Federal Reserve Board expands the money supply. D. The federal government increases the tax rate. E. Actions described in both A) and D).
Image of page 2
    If a decision maker is trying to make a best guess  for the future, his action is called A. Static expectation B. Dynamic expectation C. Adaptive expectation D. Rational expectation
Image of page 3

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

View Full Document Right Arrow Icon
    The Keynesian assumptions of the  macroeconomy include each of the  following except A. Wages and prices are sticky or fixed B. The labor market is always in equilibrium with full employment C. Animal spirit partly explains investment decisions D. Inflationary gap is because of I>S
Image of page 4
    Okun's law depicts a relationship  between the A. Percentage change in real GDP and the change in the unemployment rate. B. Percentage change in nominal GDP and the change in the labor force. C. Absolute change in real GDP and the percentage change in the unemployment rate. D. Absolute change in real GDP and the percentage change in the GDP deflator.
Image of page 5

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

View Full Document Right Arrow Icon
    Suppose the unemployment rate at the beginning of  the year is equal to 5 percent. According to Okun's  law, the following statement is FALSE: A. If the unemployment rate is unchanged during the year, real GDP tends to rise by 3 percent. B. If the average unemployment rate for the year rises to 7 percent, real GDP tends to fall by 1 percent in that year.
Image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern