Capital goods yield benefits
A. over their life span.
B. as soon as the investment decision is made.
C. before they are put to use.
D. in the present only.
Answer: A
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According to the real business cycle theory, which of the following is a TRUE statement about the effects of an oil shock in the 1970s?
A) Relative prices changed but there was no impact on the price level in general. B) The natural rate of unemployment remained unchanged, but employment levels did decline. C) The shock shifted the short-run aggregate supply curve but not the long-run aggregate supply curve. D) The shock affected real variables only and did not affect nominal variables.
Suppose that the basket of goods purchased by the typical consumer costs $188.80 this year and it cost $160 in the base year. The CPI this year would be
A) 28.8. B) 85.11. C) 118.0. D) 348.8.
When the nominal exchange rate in terms of dollars per yen rises
A) the dollar buys more yen and the dollar has depreciated. B) the dollar buys fewer yen and the dollar has depreciated. C) the dollar buys more yen and the dollar has appreciated. D) the dollar buys fewer yen and the dollar has appreciated.
Investment tax credits are subject to ________ of the lags that occur with more conventional types of fiscal policy, making them ________ activist fiscal policy tool
A) none, a promising B) none, an unpromising C) some, a promising D) some, an unpromising