Productivity tends to
A. fall during contractions.
B. rise during contractions.
C. fall during expansions.
D. rise throughout the business cycle.
Answer: A
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The Taylor rule predicted a federal funds rate which was ________ that set when Paul Volcker was chairman of the Fed, and a rate which was ________ that set when Arthur Burns chaired the Fed
A) less than; equal to B) greater than; less than C) greater than; equal to D) less than; greater than
The IS curve ________
A) shows the relationship between aggregate output and the real interest rate when the goods market is in equilibrium B) tells us that increases in autonomous consumption, investment, government purchases, or net exports raise output for any real interest rate C) tells us that a decrease in taxes or in financial frictions leads to an increase in output for any given real interest rate D) all of the above E) none of the above
Assume that the exchange rate moves from $1 = €1.2 to $1 = €0.97 . This change in exchange rate indicates that:
a. the euro has depreciated in value. b. the price of a holiday in Europe has become less expensive for U.S. residents. c. the U.S. dollar price of European chocolate has fallen. d. the U.S. dollar has appreciated in value. e. the euro has appreciated in value.
In the absence of government action, the private market would probably not provide as much police protection as is socially desirable because: a. individuals are too poorly informed about the value of police protection
b. the private benefits are greater than the private costs of providing police protection. c. it is difficult to prevent free riders from benefiting from some police protection services. d. the use of police services by one person will significantly reduce the police protection available to others.