MCprac-ex1 - PracticequestionsExam1 1) Primarily,...

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Practice questions – Exam 1 1) Primarily, macroeconomists use microeconomic principles to study A) business cycles and trends in the stock market. B) long-run economic growth and antitrust policies. C) trends in the stock market and long-term economic growth. D) long-run economic growth and business cycles. 2) The relationship between the level of growth of an economic variable, g t , and its level, y t , is best approximated as A) g t = y t y t 1 . B) g t = log y t - log y t -1 . C) y t = log g t - log g t -1 . D) log g t = y t - y t -1 . 3) Current macroeconomic models use microeconomic principles because A) they use the same language for all economists. B) they highlight the sociological aspects of production. C) the behavior of economic agents changes with policy. D) we live in a democratic society and everybody has a say. 4) In the long run, inflation is caused by A) aggressive labor unions. B) greedy monopolists. C) fast growth in the money supply. D) global warming. 5) Two plausible hypotheses to explain the productivity slowdown are A) measurement problems and adjustments to new technologies. B) large government budget deficits and large balance of trade deficits. C) globalization of capital markets and reductions in tariffs. D) adjustments to new technologies and failures in the educational system. 6) When there is high inflation A) the nominal interest rate is approximately equal to the real interest rate. B) the real interest rate is always greater than the nominal interest rate. C) the nominal interest rate is always greater than the real interest rate. D) the real interest rate is always negative. 7) Asymmetric information is: A) information revealed by economic agents turns out to be wrong. B) inflation forecasts are systematically to high or too low.
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MCprac-ex1 - PracticequestionsExam1 1) Primarily,...

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