In the fixed-price Keynesian model
In the fixed-price Keynesian model
a. wages, prices, rents and interest rates are flexible so that markets always clear.
b. there is no money illusion.
c. wages may be sticky so that involuntary unemployment may exist in labor markets.
d. supply creates its own demand.
e. none of the above
QUESTION 2 1. Compared to the Keynesian model, the classical model
a. is a demand-side model.
b. is a supply-side model.
c. believes that government intervention is necessary in times of recession.
d. was dominant after the Great Depression
e. believes that nominal variables are relevant in economic decision making.
QUESTION 3 1. In the Keynesian model, an increase in income will lead to an increase in consumption spending.
True
False
QUESTION 4 1. In the classical model, output adjusts to spending.
True
False
QUESTION 5 1. Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. Then the consumption function is given by
a. C = 400 – 0.8Yd
b. C = -400 + 0.2Yd
c. C = 320 x Yd
d. C = 400 + 0.8Yd
e. C = 400 + 0.2Yd
QUESTION 6 1. Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. At what level of income is saving = 0?
a. 400
b. 500
c. 2000
d. 320
e. 1200
QUESTION 7 1. The saving function
a. . is an upward-sloping straight line with a vertical intercept of -C0 and a slope of (1 – b).
b. shows that in some ranges of income saving may be negative.
c. is given by the equation S = -C0 + (1 – b)Yd
d. can be derived from the consumption function.
e. all of the above
QUESTION 8 1. Assume the following Keynesian model for the economy of Boogerland: AE = C + I + G + (X – M) C = 200 + .75Y I = 400 G = 200 (X – M) = 200 T=0 What is the equilibrium level of real GDP?
a. Y* = 4000
b. Y* = 1000
c. Y* = 3200
d. Y* = 750
e. Y* = 2400
QUESTION 9 9. The following table shows the levels of various aggregate economic variables for the economy of Trumpland: Y C S I G 0 20 -120 40 40 20 100 100 100 -100 40 40 20 100 200 180 -80 40 40 20 100 300 260 -60 40 40 20 100 400 340 -40 40 40 20 100 500 420 -20 40 40 20 100 600 500 0 40 40 20 100 700 580 20 40 40 20 100 800 660 40 40 40 20 100 900 740 60 40 40 20 100 1000 820 80 40 40 20 100 In Trumpland, what is the MPC? (X – M) T
a. MPC = 0.2
b. MPC = 0.8
c. MPC = 1
d. MPC = 0.9
e. MPC = 0.75
QUESTION 10 1. Referring to the question above, what is the equilibrium level of real GDP in Trumpland?
a. Y* = 400
b. Y* = 500
c. Y* = 600
d. Y* = 700
e. Y* = 800
Collepals.com Plagiarism Free Papers
Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.
Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS
Why Hire Collepals.com writers to do your paper?
Quality- We are experienced and have access to ample research materials.
We write plagiarism Free Content
Confidential- We never share or sell your personal information to third parties.
Support-Chat with us today! We are always waiting to answer all your questions.
