Test1 Multiple Choice Econ2200

assume that a bakery hires more workers and pays them wages and those workers produce more bread. GDP increases in all of the following cases except when the bread
a.is sold to households
b.is stored for later sale
c.grows stale and is thrown away
d.is sold to other firms

an increase in price P of imported goods will show up in
a.the CPI but not the GDP deflator
b.the GDP deflator but not in the CPI
c.both the CIP and the GDP deflator
d.neither the CPI nor the GDP deflator

a person is not considered unemployed if that person
a.going to school
b.waiting for a new job to start
c.has been temporarily laid off
d.is out of a job and looking for work

the CEO of Boeing buys a home. The purchase shows up in which component of expenditure?
a.gov purchases
b.consumption
c.net exports
d.investment

competative, profit-maximizing firm hires labor until the
a. marginal product of labor = nominal wage
b. marginal product of labor = real wage
c.real wage = real rental price of capital
d. nominal wage = real rental price of capital

in the classical model with fixed output, the supply and demand for goods and services are balances by
a. gov spending
b.taxes
c.fiscal policy
d.interest rate

if capital grows 3% per year and labor grows 2% per year, and capital's share is 1/3 while labor's share is 2/3, if there is no techological progress and the neoclassical assumptions hold, the growth rate of output will be
a.1 and 1/3% /year
b.1 and 2/3% / yr
c.3%/yr
d.2 and 1/3% /yr

when saving increases as the interes rate increases, an increase in investment demand results in a __ interest rate and ________ in the quantity of investment
a. higher;no change
b.higher; an increase
c.lower; no change
d.lower;an increase

when analyzing US saving vs the Golden Rule level, the US savings rate is:
a. too high
b. too low
c.just right
d.indeterminate

in the solow growth model, the source of persistenly rising living standards in the steady state is
a.depreciation
b.pop growth
c.saving
d.technological growth

suppose in the US a whole new uninhabited city appears out of nowhere, the neoclassical theory of distribution predicts
a.the real wage will rise and the real rental price of capital will fall
b.both the real wage and the real rental price of capital will fall
c.both the real wage and real rental price of capital will rise
d.the real wage will fall and the real rental price of capital will rise

in the classical model w fixed income, if interest rate is too low, then investment is too _____ and the demand for output _______ the supply
a.high; exceeds
b.high; falls short of
c.low; exceeds
d.low;falls short of

according to the model developed in CH3, when gov spending increase without a change in taxes
a.consumption increases
b.consumption decreases
c.investment increases
d.investment decreases

assume that an increase in consumer confidence raises consumers' expectations of future income and this the amount they want to consume today for any given income, this shift, in neoclassical economy, will
a.lower investment and raise the interest rate
b.raise investment and lower interest rate
c.lower both investment and the interest rate
d.raise both investment and the interest rate

a woman marries her butler. before they married she paid him 20000/year. She earns \$1,000.000 /yr before and after marriage. The marriage
a. doesnt change GDP
b.decreases GDP by 20000
c.increases GDP by 20000
d.increases GDP by more than 20000

In the Solow Model with technological change, the golden rule level of capital is the steady state that maximizes
a.output per worker
b.output per effective worker
c.consumption per worker
d.consumption per effective worker