Exam Questions Flashcards
An economy is fully employed. Suddenly a recession hits and creates non voluntary unemployment. A possible reason for this is….
sticky wages
Real interest rates becoming positive again.
- Not an explanation for this is…
- Indeed an explanation for this is….
- The ECB buying more government bonds
- many countries reaching a demographic turning point with many people starting dissaving
What’s to be included in GDP per year
A. Total amount of steel used in automotive industry
B. unsold inventory of automobiles produced in that year
C. unused stock of goods produced in previous year
D. total amount of flour used for bread
B
In Macroeconomics we will discuss….
the annual growth rate of an economies output
K changes away from the equilibrium over time will…
automatically be corrected
What is least likely to be a cause for structural unemployment?
- minimum wage
- efficiency wages paid by firms
- when fired workers need some time to find a job
- workers resist wage reductions
3.
Former colonies that were rich in 1400 are poor today. Is this causal?
no. but it’s consistent with the institution’s hypothesis of economic growth
During the financial crisis following 2007, did banks in general hold large or small excess reserves? Which is correct?:
- Large reserves bc fear of bank runs
- Large reserves bc banks did not trust another anymore
- Large reserves bc there was not a lot of credit demand
- small reserves
1.-3.
It’s important to distinguish between nominal and real GDP since the real GDP….
adjusts for price changes over time
When comparing two countries based on GDP per capita
- what can you NOT compare?
- what can you compare, neglecting the price differences?
- which is more productive
- standards of living
What’s right and wrong:
- In the equilibrium today consumption is maximized
- in the equilibrium capital invested is equal to capital depreciated
- wrong
- right!!
Can improvement in tech result in a higher equilibrium value of K?
yas
After the recession caused by covid 19, can we expect catch up growth?
no bc catch up growth in the solow model is based on shocks reducing K
Germany gives very entrepreneur 2000 euro per month. What happens to the model? and the equilibrium?
higher lv of entrepreneurs and unchanged level of equilibrium of return to entrepreneurship
opportunity costa do NOT decrease!
What happens to the model if firm perceive better business opportunities?
credit demand curve to right
