Question 1
The higher the capital utilization rate, the greater the depreciation rate.
Question 2
Higher capital utilization rates may raise the user costs of capital because higher utilization rates imply
| operating at inconvenient times. |
| paying overtime to employees operating the machines. |
| operating when complementary services like transporters are unavailable or more expensive. |
Question 3
If the rental price of capital increase, the capital utilization rate
| depends on whether the substitution rate is greater than the income effect |
Question 4
The vacancy rate in the labor market is
| the number of job openings divided by the number of unemployed people in the labor force. |
| the number of job openings divided by the number of workers in the labor force. |
| the ratio of open jobs to filled jobs. |
| the ratio of open jobs to the total number of jobs that employers want occupied. |
Question 5
Unemployment can exist in a market clearing model if it takes some search time for workers to find jobs.
Question 6
A decrease in workersâ effective real incomes while they are unemployed will
| lower the job finding rate and raise the expected duration of unemployment. |
| lower the job finding rate and the expected duration of unemployment. |
| raise the job finding rate and lower the expected duration of unemployment. |
| raise the job finding rate and the expected duration of unemployment. |
Question 7
In the Barro model, the natural rate of unemployment is
| positively related to the job separations rate. |
| positively related to the job finding rate. |
Question 8
If the interest rate increases, the real demand for money also increases
Question 9
Commodity money is money that has value because
| of the intrinsic value of the commodity. |
Question 10
High-powered money is
| money held by business for investment. |
| total currency in circulation plus depository institution deposits at the Fed. |
| total currency in circulation. |
| government bonds held by the public and depository institutions. |
Question 11
U.S. M1 money includes
| currency held by the public. |
Question 12
U.S. M2 money includes
| currency, time deposits, and government bonds. |
| savings deposits, small time deposits, and private bonds. |
| checkable deposits, savings deposits, and small time deposits. |
| retail money market mutual funds, small time deposits, and government bonds. |
Question
Money is different from other assets like capital and bonds in that
| money does not pay interest. |
| money has intrinsic value. |
| money is a better long term store of value. |
Question
If a personâs income doubles, we expect their cash holdings to
Question 15
Real money demand does not change when
| the interest rate changes. |
Question 16
All else constant, the price level rises when the supply of money increases.
Question 17
If the nominal interest rate were to increase, then
| money demand decreases and the price level increases. |
| money demand increases and the price level decreases. |
| the money supply and the price level would increase. |
| the money supply and the price level would decrease. |
Question 18
Real money demand is a function of real GDP and the nominal interest rate.
Question 19
The real return on money is zero.
Question 20
If the expected inflation rate is 5% and the unexpected inflation rate is 4%, the actual inflation is
Question 21
When the rate of growth of money is constant
| the inflation rate equals the growth rate of money. |
| the nominal interest rate rises. |
| real money balances are declining. |
Question 22
A decrease in the money growth rate in the market clearing model causes
| a decrease in the nominal interest rate. |
| an increase in money demand. |
| a decrease in the price level. |
Question 23
A decrease in the money growth rate in the market clearing model causes
| an increase in the nominal interest rate. |
| an increase in money demand. |
| an increase in the price level. |
Question 24
Under price level targeting the money supply becomes
Q 25 During a recession, the interest rate falls tending to cause money demand to rise, but is at least partly offset by real GDP falling tending to cause money demand to fall.
