In neoclassical economics, the tendency to full employment depends on: O perfectly flexible wages O perfect competition in all markets, including factor markets O perfectly flexible interest rates O All of these
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- If an earthquake destroys some of the capital stock, the neoclassical theory of distribution predicts: O the real wage will fall and the real rental price of capital will rise. O both the real wage and the real rental price of capital will rise. O the real wage will rise and the real rental price of capital will fall. O both the real wage and the real rental price of capital will fall.Based on our understanding of the labor market model, an increase in oil price will make, Select one: O a. a rise in natural rate of output O b. a reduction in the equilibrium unemployment rate O c.a rise in the real wage O d. a rise in the aggregate priceDarshan needs to borrow money to become a nurse practitioner. Suppose that compensation of nurse practitioners is expected to increase. Assuming nothing else changes, this means that if Darshan borrows now, his cost of borrowing money is expected to due to the following factor: O Decreasing preferences for future consumption. O Rising benefits of becoming a nurse practitioner. Rising compensation of nurse practitioners provokes inflation. Which of the following events could decrease the cost of money? Check all that apply. The Federal Reserve purchases Treasury securities held by banks Inflation increases The federal deficit decreases The Federal Reserve sells Treasury securities to banks decrease increase
- The random walk of consumption states that: O A. consumption this year is not a good forecast of consumption next year. O B. news about the future is predictable. OC. consumers are foresighted, so changes in consumption are predictable. O D. consumers are foresighted, so changes in consumption are unpredictable. Fischer and Taylor pointed out an important characteristic of both wage and price setting, the staggering of wage and price decisions. Which of the following best explains the rational for these adjustments? O A. When hiring new engineers or business school graduates, firms do not consider the prevailing wage in the market for similarly educated workers. O B. Wage adjustments occur at different times for different firms throughout the year, much as the dates for firms' fiscal years vary throughout the year. OC. Indexing of wages to macroeconomic variables, such as the inflation rate, occurs frequently in wage setting arrangements of one year or less. OD. Bargaining among labor…Economists use the neoclassical growth model to explain fluctuations in the business cycle because can; the model shows how economic growth changes when the factors of production (capital, labour force and technology) change. O cannot; the model does not take into account technology changes. O cannot; the model only explains what determines the long term trends in output or output per labour. O can; as a long-run model, it captures business cycles over very long periods of time. O cannot; the model is more focused on government activity than private sector activity. O Ociples of Macroeconomics || Fall20 1 What does the PPI measure? ed Select one: d out of O a the average change in the prices paid for all goods produced in the economy over a given year O b. the level of production of goods and services generated in the economy in a given year question O c. the difference between the prices consumers pay for goods and services and the prices producers pay for O d. the average of the prices received by producers of goods and services at all stages of the production pro Ti navigation Type here to search
- In our four main macroeconomic models, which of the following statements is false? O Our macro models are all short-run models O The goods and services market is represented in all four models O Output is a variable to be determined O Output is an exogenous variableSuppose the long run potential output is given by the production function Yp = A*F(N,K) where A is the level of technology, N is the level of employment and K is the stock of capital. Which of the following is CORRECT? Higher interest rates would shift LRAS to the right O b. Growth in the labor force will shift LRAS to the right Oc An earthquake will shift LRAS (long-run aggregate supply) to the right O d. Improved technology will shift LRAS to the leftAn inflationary gap is automatically closed by wages that shift the O a) rising; SRAS curve rightward O b) falling; SRAS curve rightward c) falling: SRAS curve leftward d) rising: SRAS curve leftward
- 11) Despite known problems in the method of calculating the unemployment rate, the approach is rarely changed in order to preserve data compatibility. O True O False 12) At this monient in time the U.S. economy has deflation. O True O False 13) If a person is classified as unemployed by the BLS, then that person is not in the labor force. O True O False 14) If aggregate supply increases and the results persist for at least six months, then the economy will have stagflation. O True O False 15) A decrease in the price level causes a decrease in the purchasing power of money. This helps to explain why the aggregate demand curve slopes down. 16) O True O False It is known that the method used by the BLS to calculate the U3 unemployment rate blases the results. All of the biases tend to cause the reported U3 statistic to be lower than what it really is. O True O FalseIf Aggregate Demand is at AD2, production will be high as possible. Can production stay at this level foever? Price Level Price Level GDP POTENTIAL AD₁ GDP POTENTIAL AS GDP MAX AD₁ AS GDP MAX AD2 GDP AD2 GDP Select one: O a. No, because eventually, higher aggregate demand will raise prices, and this will make some people less willing to do additional work Oc. All of these are true Od. Yes, because this is maximum production e. None of these are true O b. No, because eventually higher aggregate demand will cause prices to fall, and this will make producers decide to produce lessUsing calculus, show the effect of a change in the wage on the amount of leisure an individual wants to consume. The effect of a change in the wage, w, on leisure, L, is O A. ƏL dw O B. ƏL dw O c. ƏL dw O D. ƏL dw = ƏL dw = ƏL ƏL = (ONE ) + (11) (1) dw dY dw U constant ƏL U constant 이름 이름 dwu constant +L OE. both A and B. +L dwu constant ƏL dY +L ƏY dw ƏL dY