ECON 102 Middy
What percentage of wealth is held by the top 1%?
40%
What percentage of wealth is held by the top 10%?
75%
The following multiple choice question is based on the Bathtub model.Assume that initially, the unemployment rate is given by u0 = 10%. How many people lose their jobs each month initially? A. 900,000 B. 1,000,000 C. 10,000,000 D. 1,900,000 E. 190,000
A. 900,000
Following the model with heterogeneous agents under a Keynesian framework (Lecture 9 - Redistribution Policies): A. A redistribution of income from low to high marginal propensity to consume agents can boost GDP. B. Only the rich agents can consume. C. Income should go to the rich agents for the economy to have larger GDP. D. A tax reduction for the poor is not so effective to increase GDP as a tax cut for the rich.
A. A redistribution of income from low to high marginal propensity to consume agents can boost GDP.
What is an endogenous variable? A. A variable that depends on other variables in the model B. A parameter C. A variable not explained within the model but that is instead taken as given D. A consumption function
A. A variable that depends on other variables in the model
Suppose that the marginal propensity to consume is 0.8. Given this information, which of the following events will cause the largest increase in output? A. G increases by 200. B. T decreases by 200. C. I increases by 150. D. both A and B.
A. G increases by 200.
Say's Law refers to the (controversial) idea that: A. Increased supply will always find a willing buyer. B. Economies always operate efficiently. C. Increasing government debt always displaces investment. D. Higher savings effort leads to lower aggregate savings. E. Government debt will grow even when the primary budget is balanced.
A. Increased supply will always find a willing buyer.
The marginal propensity to save in the Keynesian model: A. Is constant. B. Depends on income. C. Depends on taxes. D. Is the marginal propensity to consume plus one.
A. Is constant.
In the Neoclassical model (as discussed in class), tax cuts for households can increase GDP because A. Lower taxes increase households' willingness to spend B. Lower taxes increase productivity of firms C. Lower taxes increase labor supply D. Lower taxes force government to reduce wasteful spending E. Lower taxes distribute income to high marginal-propensity-to-consume individuals
A. Lower taxes increase households' disposable income
The multiplier of government expenditures in the Keynesian model is understood as: A. The change in GDP coming from a change in government expenditures. B. The change in government expenditures as a result of GDP changes. C. The rise of inequality between high-income people and low-income people. D. A change in the demand for goods and hence a change in prices to clear the markets.
A. The change in GDP coming from a change in government expenditures.
An important assumption of Keynesian theory is: A. There is capacity (unemployed resources) to increase supply of goods after an increase in demand. B. People always find jobs if they want to work, i.e. the unemployment is only voluntary. C. The government can not implement automatic stabilizers, i.e. taxes of the form: T = t0 + t1Y . D. Investment has to be exogenous, i.e. can not depend on output.
A. There is capacity (unemployed resources) to increase supply of goods after an increase in demand.
In the basic Keynesian model, where C = c0 + c1(Y − T), I = ¯I, G = G¯ and T = T¯, consumers will only purchase goods if they have positive income. A. True if c0 = 0. B. True: they always consume a fraction of their disposable income and save the rest. C. False: they will adjust consumption according to their risk aversion. D. False: if the marginal propensity to consume is positive, then it implies that agents will consume a positive amount of goods regardless of their income.
A. True if c0 = 0.
Based on our understanding of the paradox of thrift, we know that a reduction in the desire to save will cause: A. an increase in equilibrium GDP. B. a reduction in GDP. C. an increase in government spending. D. no change in equilibrium GDP. E. a permanent reduction in the level of saving.
A. an increase in equilibrium GDP.
Which of the following will not increase equilibrium output in the short run? A. increases in R&D B. increases in consumer confidence C. increases in investment demand D. increases in government spending E. decreases in taxes
A. increases in R&D
An implication of the Solow model is that once an economy reaches the steady state: A. per capita consumption is constant. B. per capita output is constant, but per capita capital is not C. per capita capital is variable D. per capita consumption continues to grow E. per capita consumption is growing.
A. per capita consumption is constant.
Which of the following best defines the IS curve? A. the combinations of i and Y that maintain equilibrium in the goods market B. illustrates the effects of changes in i on investment C. illustrates the effects of changes in i on desired money holdings by individuals D. the combinations of i and Y that maintain equilibrium in financial markets
A. the combinations of i and Y that maintain equilibrium in the goods market
Suppose that the consumption function is given by C(YD) = 250 + 0.75YD, where YD ≡ Y − T is disposable income. Then private saving S is: A. −250 + 0.25YD. B. −250 + 0.75YD. C. −1000 + 0.25YD. D. −1000 + 0.75YD. E. −250 − 0.75YD.
A. −250 + 0.25YD.
In the Solow model, the level of GDP per capita is: A parameter. An exogenous variable. An endogenous variable. Constant always. Constant in the long run.
An endogenous variable and Constant in the long run.
Suppose that consumption is given by C = 10 + 0.6(Y − T), while taxes (T), investment (I), and government spending (G) are fixed exogenously. In the Keynesian goods market model, how much does GDP change when taxes are increased by $1? A. -$2.5 B. $-1.5 C. $0 D. $1.5 E. $2.5
B. $-1.5
According to the Keynesian-cross analysis, if the marginal propensity to consume is 0.6 and government expenditures and autonomous taxes are both increased by 100, equilibrium income will rise by: A. 0. B. 100. C. 150. D. 250.
B. 100. Gov expenditure increases equilibriu income and taxes decrease it. Gov side= (1/(c-1))(T). Taxation side= (c1/(1-c1))(T)
2000 + .9YD, investment is exogenous, and the economy is closed, what decrease in taxes must occur for equilibrium output to increase by 1000? A. 900. B. 111.111... C. 100. D. 1000. E. 500
B. 111.111...
What was per capita GDP growth in the United States over 1870-2012? A. 1% B. 2% C. 3% D. 4% E. 5%
B. 2%
In 2014, what was the fraction of US GDP in total world output? A. 13% B. 23% C. 33% D. 43%
B. 23%
If GDP per capita grows at 2% per year, how long does it take for it to double? A. 50 years. B. 35 years. C. 20 years. D. 65 years E. 80 years
B. 35 years.
If GDP per capita grows at 2% per year, how long does it take for it to double? A. 50 years. B. 35 years. C. 20 years. D. 65 years E. 80 years.
B. 35 years.
How is a financial bubble similar in many ways to public debt, and to a pay-as-you-go system? A. It transfers resources from the old to the young. B. According to neoclassical economics, it crowds out investment. C. According to neoclassical economics, it crowds in investment. D. None of the above.
B. According to neoclassical economics, it crowds out investment.
What is the biggest sector of capital stock? A. Equipment B. Buildings C. consumer goods D. Durable goods
B. Buildings
Which of the following cannot increase long-run growth? A. Patents. B. Capital accumulation. C. Government funded research. D. Prizes. E. Privately funded research.
B. Capital accumulation.
Select the statement that best completes the following sentence. In the overlapping generations model that we saw in class, total investment in the economy will A. Equal savings which is mostly made up of the precautionary savings of the old. B. Equal the total income of the young minus total consumption of the young. C. Equal firms' profits, which they reinvest. D. Depend on the interest rate that the young get on their savings.
B. Equal the total income of the young minus total consumption of the young.
In a Keynesian world, there is no room for policy intervention to increase GDP in a recession: A. False, the government can increase taxes to increase GDP. B. False, the government can reduce taxes to increase GDP. C. True, taxes and government expenditures do not affect GDP. D. True, GDP will only be determined by firm's investment.
B. False, the government can reduce taxes to increase GDP.
Which component of GDP is most volatile? A. Consumption B. Investment C. Non-durable goods expenditures D. Services expenditures
B. Investment
If Pt is the price level at time t, then inflation at time t + 1 is given by: A. 1/Pt+1 B. Pt+1/Pt − 1 C. Pt+1 − Pt D. Pt/Pt+1 E. (Pt+1 − Pt)/Pt
B. Pt+1/Pt − 1 E. (Pt+1 − Pt)/Pt
An extreme version of supply-side economics implies that: A. Tax cuts for the rich are self-financing, because we are on the left side of the Laffer curve. B. Tax cuts for the rich are self-financing, because we are on the right side of the Laffer curve. C. Redistributing income from the rich to the poor reduces government debt. D. Keynesian stimulus is self-financing. E. None of the above.
B. Tax cuts for the rich are self-financing, because we are on the right side of the Laffer curve.
When Jean-Baptiste Say was writing, which country was being accused of saving too much? A. China B. The United Kingdom. C. France. D. The United States. E. Germany
B. The United Kingdom.
Which of the following is connected to the issue of Say's law? A. The rich work and then lavishly spend their money on yachts and luxury goods. B. The rich work and save, neither to consume today nor tomorrow. C. The rich work and save, so that their children can have a better life. D. The rich will soon be rich enough to stop working altogether.
B. The rich work and save, neither to consume today nor tomorrow.
According to the Solow growth model, what is the effect of government deficits on the U.S. economy? A. They reduce the private saving rate. B. They lead to lower steady-state output. C. They increase the private saving rate. D. They lead to higher steady-state output.
B. They lead to lower steady-state output.
Which of the following would tend to make the government expenditure multiplier smaller? A. an increase in the marginal propensity to consume B. an increase in the marginal propensity to save C. a reduction in taxes D. a reduction in government spending E. none of the above
B. an increase in the marginal propensity to save
Which of the following would tend to make the tax expenditure multiplier smaller? A. an increase in the marginal propensity to consume B. an increase in the marginal propensity to save C. a reduction in taxes D. a reduction in government spending E. none of the above
B. an increase in the marginal propensity to save
Which of the following would tend to make the tax multiplier smaller? A. an increase in the marginal propensity to consume B. an increase in the marginal propensity to save C. a reduction in taxes D. a reduction in government spending E. none of the above
B. an increase in the marginal propensity to save
Which of the following is an asset of a central bank? A. currency B. bonds C. reserves D. none of the above
B. bonds
The following multiple choice question is based on the Bathtub model.What is the steady-state unemployment rate u ∗ ? A. sL/(s + f) B. s/(s + f) C. fL/(f + s) D. f/(f + s)
B. s/(s + f)
Suppose investment spending is not very sensitive to the interest rate. Given this information, we know that A. the IS curve should be relatively flat. B. the IS curve should be relatively steep. C. the LM curve should be relatively flat. D. the LM curve should be relatively steep. E. neither the IS nor the LM curve will be affected.
B. the IS curve should be relatively steep.
Since approximately 1970, the most stable Phillips-type relationship for the United States has been between which of the following? A. the rate of inflation and the change in the unemployment rate B. the unemployment rate and the change in the rate of inflation C. the change in the unemployment rate and the change in the rate of inflation D. the inverse of the unemployment rate and the rate of inflation E. the unemployment rate and the rate of inflation
B. the unemployment rate and the change in the rate of inflation
In the lecture, we argued that "rational bubbles": A. cannot occur because they are a Ponzi scheme. B. transfer resources from young to old in an unstable way. C. happen because some investors have incorrect beliefs. D. reduce the real interest rate. E. actually fund useful investments.
B. transfer resources from young to old in an unstable way.
The following multiple choice question is based on the Bathtub model. In the Bathtub model, what is the law of motion for unemployment? A. ∆Ut+1 = fUt − sEt B. ∆Ut+1 = sEt − fUt C. Ut+1 = sEt − fUt D. ∆Ut+1 = fL − sEt E. Ut+1 = fUt − sEt
B. ∆Ut+1 = sEt − fUt
In 2014, output per capita in the US was approximately equal to : A. $15,000 B. $35,000 C. $55,000 D. $75,000 E. None of these answers are correct.
C. $55,000
In the two-period consumption model, by how much does utility vary when the consumer saves one more unit of income? A. u 0 (c0) B. (1 + r)βu0 (c1) C. (1 + r)βu0 (c1) − u 0 (c0) D. u 0 (c0) − (1 + r)βu0 (c1)
C. (1 + r)βu0 (c1) − u 0 (c0)
What was GDP growth in the United States over 1870-2012? A. 1.5% B. 2.5% C. 3.5% D. 4.5% E. 5.5%
C. 3.5%
The following multiple choice question is based on the Bathtub model.Assume a monthly job separation rate equal to s = 1%, and a monthly job finding rate equal to f = 19%. Assume that the labor force is given by L = 100 million. What is the steady-state unemployment rate? A. 4.8% B. 4% C. 5% D. 5.8% E. 5.2%
C. 5%
Which of the following is a feature of the U.S. labor market? A. During recessions, the unemployment rate decreases. B. The labor force participation rate of men has continuously increased since 1990. C. During the Great Recession, the number of job separations has decreased. D. The labor force participation rate of women is currently around 20%.
C. During the Great Recession, the number of job separations has decreased.
"Crowding Out" of government debt refers to the idea that: A. Government debt reduces output today B. Government debt reduces consumption today C. Government debt reduces investment D. Government debt reduces government spending in the future E. Government debt leads to higher taxes in the future
C. Government debt reduces investment
Which of the following is true about the share of goods VS services in GDP ? A. In both 1945 and 2018, goods are a larger share of GDP than services. B. In both 1945 and 2018, services are a larger share of GDP than goods. C. In 1945, goods were a larger share of GDP than services. It's the opposite in 2018. D. In 1945, services were a larger share of GDP than goods. It's the opposite in 2018
C. In 1945, goods were a larger share of GDP than services. It's the opposite in 2018.
The Paradox of Thrift refers to the idea that A. Increases in savings effort can lead to higher aggregate consumption B. Increases in savings effort can lead to higher aggregate output C. Increases in savings effort can lead to lower aggregate savings D. Increases in savings effort can lead to lower aggregate tax revenue E. Increases in savings effort can lead to lower thriftiness
C. Increases in savings effort can lead to lower aggregate savings
According to Greg Mankiw, which factor was NOT contributing to hold back consumption in November 2008: A. Declining house values. B. Declining retirement saving (401(k) balances). C. Increasing interest rates on corporate bonds. D. Rising unemployment rate. E. Declining stock market prices
C. Increasing interest rates on corporate bonds.
According to Ricardian equivalence, raising taxes: A. Only reduces consumption. B. Only increases public debt. C. Leaves consumption unchanged. D. Leaves public debt unchanged. E. Both reduces consumption and increases public debt.
C. Leaves consumption unchanged.
Looking back at U.S. macroeconomic performance since 1929: A. Real GDP growth was the same before and after 1971. B. Real GDP growth was higher after 1971. C. Real GDP growth was lower after 1971.
C. Real GDP growth was lower after 1971.
Which of the following statements is false? A. Aggregate data suggests that the MPC is between 0.58 and 0.66. B. The MPC may be estimated using individual-level data on saving behavior, or proprietary data from major credit card companies. C. The level of the MPC is a matter of strong consensus among economists. D. Depending on the value for the MPC, stimulus policy may be more or less effective
C. The level of the MPC is a matter of strong consensus among economists.
Based on the Keynesian Cross model, an equal and simultaneous reduction in G and T will cause: A. an increase in output. B. no change in output. C. a reduction in output. D. an increase in investment.
C. a reduction in output.
Which of the following would tend to make the government expenditure multiplier smaller? A. an increase in the marginal propensity to consume B. a reduction in autonomous investment C. an increase in the proportional income tax rate D. a decrease in the marginal propensity to save E. none of the above
C. an increase in the proportional income tax rate
For this question, assume that the Phillips curve equation is represented by the following: πt − πt−1 = (m + z) − αut . Which of the following will cause a reduction in the natural rate of unemployment? A. an increase in m B. an increase in z C. an increase in α D. an increase in actual inflation E. an increase in expected inflation
C. an increase in α
Which of the following is a characteristic of bonds? A. pay zero nominal interest B. can be used for transactions C. are sold for a price that varies inversely with the interest rate D. all of the above E. none of the above
C. are sold for a price that varies inversely with the interest rate
In the Solow model, if we assume that capital depreciation rates are the same across all countries, differences in per capita output can be explained by: A. the steady state capital stock. B. the initial capital stock and saving rates. C. differences in productivity and saving rates. D. the labor stock and saving rates. E. None of these answers are correct.
C. differences in productivity and saving rates.
If the growth rate of yt after T periods is G, then the average growth rate of yt per period is: A. (1 + G) T − 1 B. (1 + G) 1/T C. (1 + G) T D. (1 + G) 1/T − 1 E. none of the above
D. (1 + G) 1/T − 1
The following multiple choice question is based on the Bathtub model.Assume that initially, the unemployment rate is given by u0 = 10%. How many people find a job each month initially? A. 900,000 B. 1,000,000 C. 10,000,000 D. 1,900,000 E. 190,000
D. 1,900,000
In the Solow model, if productivity of country A is about three times as large as the productivity in country B, and the savings rate of country A is about twice as large as the savings rate in country B then in the steady state output of country A is approximately: A. 6 times as large as in country B. B. 2 times as large as in country B. C. 5 times as large as in country B. D. 7 times as large as in country B. E. 9 times as large as in country B.
D. 7 times as large as in country B.
In the standard Solow model seen in class, an increase in the savings rate s: A. Has a positive effect on the consumption per capita, by increasing the steady state output per capita. B. Has a negative effect on the consumption per capita, since the share consumed from the steady state output per capita is lower. C. Has a negative effect on the consumption per capita, since it reduces the steady state stock of capital (decreasing returns to scale) D. Both a. and b. are correct, so we cannot know the total effect without knowing the specific values of the parameters.
D. Both a. and b. are correct, so we cannot know the total effect without knowing the specific values of the parameters.
In the Neoclassical labor model (where f(l) = Al1−α ), if we change α, we will observe the following effect on the (log) labor demand curve: A. The curve will change its slope. B. The curve will be shifted. C. The curve won't suffer any change. D. Both a. and b. are correct.
D. Both a. and b. are correct.
What is the largest component of national income? A. Corporate profits B. Proprietors' income C. Rental income of persons D. Compensation of employees E. Indirect taxes
D. Compensation of employees
In the basic Keynesian model, where C = c0 + c1(Y − T), I = ¯I, G = G¯ and T = T¯: A. Taxes are more effective than government expenditures to increase GDP (for the same dollar amount of deficit). B. The multiplier of gov. exp. is 1/(1+c1 ) . C. Aggregate demand does not depend on the level of investment done by firms. D. Government expenditures are more effective than taxes to increase GDP (for the same dollar amount of deficit).
D. Government expenditures are more effective than taxes to increase GDP (for the same dollar amount of deficit).
The Laffer curve plots: A. Public debt as a function of tax rates. B. Consumption as a function of tax rates. C. Investment as a function of tax rates. D. Government receipts as a function of tax rates. E. None of the above.
D. Government receipts as a function of tax rates.
Why was John Maynard Keynes fundamentally a conservative? A. He favored reduction in taxes over government spending. B. He believed in Say's law. C. He would side with the aristocratic establishment, against the educated bourgeoisie. D. He was trying to make sure that the capitalist system would survive. E. He was opposing Roosevelt's policies.
D. He was trying to make sure that the capitalist system would survive.
Which of the following best describes why the aggregate demand curve slopes downward ? A. If the central bank observes a low rate of inflation, the monetary policy rule dictates an increase in the real interest rate. The high interest rate reduces output by reducing investment demand in the economy. B. If the central bank observes a high rate of inflation, the monetary policy rule dictates a decrease in the real interest rate. The low interest rate increases output by reducing investment demand in the economy C. If the central bank observes a low rate of inflation, the monetary policy rule dictates a decrease in the real interest rate. The low interest rate reduces output by reducing investment demand in the economy. D. If the central bank observes a high rate of inflation, the monetary policy rule dictates an increase in the real interest rate. The high interest rate reduces output by reducing investment demand in the economy. E. None of these answers is correct.
D. If the central bank observes a high rate of inflation, the monetary policy rule dictates an increase in the real interest rate. The high interest rate reduces output by reducing investment demand in the economy.
Who has said: "The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists."? A. Paul Krugman B. Karl Marx C. J´erome Powell D. Joan Robinson E. Donald Trump
D. Joan Robinson
According to Ricardian Equivalence, if taxes are lowered: A. People will consume more B. People will consume less C. People will stop consuming D. People will consume the same amount
D. People will consume the same amount
Which economic orthodoxes are falling with interest rates, according to Neil Irwin? A. The idea that government deficits decrease interest rates. B. Keynesian economics. C. Trickle-down economics. D. The idea that government deficits crowd out investment spending. E. The idea that there exists a paradox of thrift.
D. The idea that government deficits crowd out investment spending.
According to Keynesian economics, a demand-side policy can be selffinancing if: A. Ricardian equivalence holds. B. Jean-Baptiste Say was right. C. The multiplier is equal to 1/(1 − c1 − b1). D. The multiplier is larger than the inverse of the proportional tax rate. E. The government lowers taxes instead of increasing expenditures.
D. The multiplier is larger than the inverse of the proportional tax rate.
How can we test "trickle-down economics" using state-level data? A. We use state-level changes in aggregate taxes as instruments. B. We may send out surveys to businessmen in each different states. C. We use the timing of reforms, and compare the effects of the Bush versus the Clinton tax cuts. D. We compare economic growth in states with more or less high income people, following national-level tax changes. E. None of the above.
D. We compare economic growth in states with more or less high income people, following national-level tax changes.
Which of the following would tend to make the government expenditure multiplier greater? A. a decrease in the marginal propensity to consume B. a reduction in lump-sum taxes C. a reduction in autonomous consumption D. a decrease in the marginal propensity to save E. none of the above
D. a decrease in the marginal propensity to save
In the Phillips curve equation, which of the following will cause an increase in the current inflation rate? A. an increase in the expected inflation rate B. a reduction in the unemployment rate C. an increase in the markup, m D. all of the above E. none of the above
D. all of the above
Which of the following is a component of money? A. coins held by the nonbank public B. bills held by banks C. checkable deposits D. all of the above
D. all of the above
In the formula C(Y −T) = c0 +c1(Y −T), what is the Marginal Propensity to Consume ? A. C(Y − T) B. Y − T C. c0 D. c1
D. c1
Which of the following is not a component of GDP according to the "product approach"?: A. imports B. investment C. government spending D. compensation of employees E. none of the above
D. compensation of employees
Consider the consumption function Ct/Y¯ t = ¯ac + ¯xY˜ t . If ¯x = 0.9, a 1 percent positive demand shock: A. raises short-run output by 0.9 percent B. raises short-run output by 9 percent C. raises short-run output by 1 percent D. raises short-run output by 10 percent E. has no impact on short-run output
D. raises short-run output by 10 percent
In the OLG model discussed in class, which of the following was a conclusion about Pay-As-You-Go pensions (e.g. Social Security) and rolling over government debt? A. The two policies are fundamentally different with different effects on interest rates. B. Both policies help to raise the level of the capital stock. C. Social Security tends to help today's young while government debt tends to hurt today's young. D. Rolling over government debt is always infeasible while PAYG is feasible. E. The two policies are broadly similar ways to address excessively high levels of capital accumulation.
E. The two policies are broadly similar ways to address excessively high levels of capital accumulation.
In the overlapping generations model, why do people save? A. To leave bequests. B. For prestige. C. Because of religious beliefs. D. They have too much money. E. To plan for retirement.
E. To plan for retirement.
The money demand curve will shift to the left when which of the following occurs? A. a reduction in the interest rate B. an increase in the interest rate C. an open market sale of bonds by the central bank D. an increase in nominal income E. none of the above
E. none of the above
The original Phillips curve implied or assumed that: A. the markup over labor costs was zero. B. the expected rate of inflation would be zero. C. the actual and expected rates of inflation would always be equal. D. all of the above E. none of the above
E. none of the above
Which country was first used to illustrate the relationship between unemployment and inflation (i.e., the original Phillips curve)? A. France B. United States C. Canada D. Germany E. none of the above
E. none of the above
Which of the following individuals would be considered unemployed? A. an individual who works only part-time B. an individual who works full-time in a family business, but is not paid C. an individual who is not working and is not looking for work D. all of the above E. none of the above
E. none of the above
Which of the following will cause the money multiplier (the ratio Md/Hd ) to become smaller? A. an increase in high powered money B. a decrease in the ratio of reserves to checkable deposits C. an increase in the public's preference for checking deposits as opposed to holding currency D. a reduction in high powered money E. none of the above
E. none of the above
For the US economy, which of the following represents the largest component of GDP? A. imports B. investment C. government spending D. exports E. none of the above: there exists a component of GDP that is greater than all the above in the US economy
E. none of the above: there exists a component of GDP that is greater than all the above in the US economy
For the US economy, which of the following represents the largest component of GDP? A. imports B. investment C. government spending D. exports E. none of the above: there exists a component of GDP that is greater than all the above in the US economy
E. none of the above: there exists a component of GDP that is greater than all the above in the US economy
In Google Sheets, which built-in function did we use in Problem Set 1 to linearize the logarithm of GDP? A. LINEARIZE B. LOG-LINEARIZE C. FORECAST D. LOG E. EXP
FORECAST
T/F: Government investment is larger than private investment
False
T/F: Saving is variable in GDP
False
What are the three different approaches for measuring GDP? The production approach. The nominal approach. The expenditure approach. The profit approach. The income approach.
The production, expenditure and income approach
T/F: According to Ricardian Equivalence taxation and debt are different but equivalent in effect
True
What is the shape of a utility function and why?
Utility is increasing and concave because the more consumption the better but the benefits are less and less for each additional consumption
Which of the following cause rise in GDP (multiple answers): Capital interest rates technology tax rates savings population size
capital, technology, and population size
What is the net savings in the US?
slightly higher than 0