1) Over the past year, productivity grew 1%, capital grew 4%, and labor grew 2%. If the elasticities of output with respect to capital and labor are 0.5 and 0.5, respectively, how much did output grow? A) 3% B) 4% C) 5% D) 6%
2) In the long-run, an increase in the population growth rate in a steady-state economy will cause A) an increase in capital per worker and an increase in consumption per worker. B) an increase in capital per worker and a decrease in consumption per worker. C) a decrease in capital per worker and a decrease in consumption per worker. D) a decrease in capital per worker and an increase in consumption per worker.
3) You transfer $500 from your checking account to your savings account. What is the overall effect on M1 and M2? A) M1 falls by $500, M2 rises by $500. B) M1 falls by $500, M2 is unchanged. C) M1 rises by $500, M2 is unchanged. D) M1 is unchanged, M2 rises by $500.
4) An increase in the real interest rate on non-monetary assets is likely to cause A) a decline in the real money demand. B) an increase in the real money demand. C) no change in the real money demand. D) no change in the real money demand only if the income elasticity of real money demand is zero.
5) The most liquid asset on this list is A) money. B) bonds. C) houses. D) stocks.
1) Over the past year, productivity grew 1%, capital grew 4%, and labor grew 2%. If the elasticities of output with respect to capital and labor are 0.5 and 0.5, respectively, how much did output grow? A) 3% B) 4% C) 5% D) 6%
2) In the long-run, an increase in the population growth rate in a steady-state economy will cause A) an increase in capital per worker and an increase in consumption per worker. B) an increase in capital per worker and a decrease in consumption per worker. C) a decrease in capital per worker and a decrease in consumption per worker. D) a decrease in capital per worker and an increase in consumption per worker.
3) You transfer $500 from your checking account to your savings account. What is the overall effect on M1 and M2? A) M1 falls by $500, M2 rises by $500. B) M1 falls by $500, M2 is unchanged. C) M1 rises by $500, M2 is unchanged. D) M1 is unchanged, M2 rises by $500.
4) An increase in the real interest rate on non-monetary assets is likely to cause A) a decline in the real money demand. B) an increase in the real money demand. C) no change in the real money demand. D) no change in the real money demand only if the income elasticity of real money demand is zero.
5) The most liquid asset on this list is A) money. B) bonds. C) houses. D) stocks.
