chap05 - Macroeconomics, 3e (Williamson) Chapter 5 A...

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Unformatted text preview: Macroeconomics, 3e (Williamson) Chapter 5 A Closed- Economy One- Period Macroeconomic Model 1) An economy that has no interaction with the rest of the world is called A) an isolated economy. B) a closed economy. C) a parochial economy. D) a rogue nation. Answer: B Question Status: Previous Edition 2) An economy that engages in international trade is called A) a cooperative economy. B) a modern economy. C) an engaged economy. D) an open economy. Answer: D Question Status: Previous Edition 3) Goods and services provided by the government are called A) government goods. B) public goods. C) free goods. D) social goods. Answer: B Question Status: Previous Edition 4) In an economic model, an exogenous variable is A) a stand in for more complicated variables. B) determined by the model itself. C) determined outside the model. D) a variable that has no effect on the workings of the model. Answer: C Question Status: Previous Edition 5) In an economic model, an endogenous variable is A) a stand in for more complicated variables. B) determined by the model itself. C) determined outside the model. D) a variable that has no effect on the workings of the model. Answer: B Question Status: Previous Edition 6) In a one period model, government is likely to run A) a deficit but not a surplus. B) a surplus but not a deficit. C) either a surplus or a deficit. D) neither a surplus nor a deficit. Answer: D Question Status: Previous Edition 7) In a one period economic model, the government budget constraint requires that government spending A) = taxes + transfers. B) = taxes + borrowing. C) > 0. D) = taxes. Answer: D Question Status: Previous Edition 8) Which of the following relationships does not hold in the one period model? A) G = T B) Y = C+G C) Y = zF(K,N) D) = Y- wN- C Answer: D Question Status: New 9) Fiscal policy refers to a government's choices over its A) expenditures, taxes, transfers, and borrowing. B) expenditures, taxes, issuance of money, and borrowing. C) expenditures, foreign affairs, issuance of money, and borrowing. D) issuance of money, taxes, environmental regulations, and foreign affairs. Answer: A Question Status: Previous Edition 10) Making use of an economic model is a process of A) solving hundreds of simultaneous equations. B) running experiments to determine how changes in the endogenous variables will change the exogenous variables. C) running experiments to determine how changes in the exogenous variables will change the endogenous variables. D) resolving inconsistencies in the actions of economic agents. Answer: C Question Status: Previous Edition 11) A competitive equilibrium is a state of affairs in which A) markets clear, and output is maximized....
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chap05 - Macroeconomics, 3e (Williamson) Chapter 5 A...

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