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31) The theories of investment were developed by A) Friedman and

Question : 31) The theories of investment were developed by A) Friedman and : 1940426

31) The theories of investment were developed by

A) Friedman and Phelps.

B) Hicks and Hansen.

C) Modigliani and Friedman.

D) Lucas and Sargent.

E) Tobin and Jorgenson.

32) Which of the following argued that the Great Depression was caused by monetary factors?

A) Friedman and Schwartz

B) Hicks and Hansen

C) Modigliani and Friedman

D) Lucas and Sargent

E) Tobin and Jorgenson

33) Which of the following argued that a long-run trade-off between inflation and unemployment could not exist?

A) Friedman and Phelps

B) Hicks and Hansen

C) Modigliani and Friedman

D) Lucas and Sargent

E) Tobin and Jorgenson

34) The steeper is the IS curve,

A) the more effective is monetary policy.

B) the less effective is monetary policy.

C) the effectiveness of monetary policy does not change.

D) a given change in the money supply will have a greater effect on output.

35) As the IS curve becomes flatter, we know that

A) a given change in the money supply will cause a larger change in output.

B) a given change in the money supply will cause a smaller change in output.

C) a given change in the money supply will cause the same change in output.

D) monetary policy becomes less effective.

36) Stagflation refers to

A) a reduction in inflation.

B) a simultaneous reduction in inflation and reduction in unemployment.

C) a liquidity trap.

D) reduction in the price level and a reduction in the unemployment rate.

E) none of the above

37) Which of the following led a strong attack against mainstream macroeconomists during the 1970s?

A) Friedman and Phelps

B) Hicks and Hansen

C) Modigliani and Friedman

D) Lucas, Barro, and Sargent

38) The research by Robert Hall on the theory of consumption suggests that the best forecast of consumption for next year would be

A) unpredictable.

B) random.

C) this year's consumption.

D) last year's consumption.

39) The more staggered are labor contracts,

A) the more rapidly the economy will adjust to changes in aggregate demand.

B) the less rapidly the economy will adjust to changes in aggregate demand.

C) the greater the inflationary effects of a given change in money growth in the medium run.

D) the less inflationary effects of a given change in money growth in the medium run.

40) The new classical interpretation of the economy suggests that

A) output is always above the natural level.

B) output is always below the natural level.

C) output is always equal to the natural level.

D) recessions will not occur.

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