ECO 302 Week 10 Quiz - Strayer
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Quiz Chapter 16
TRUE/FALSE
1. A
model with sticky prices and nominal wages is a disequilibrium model.
2. Menu
costs are the posted prices of a firm.
3. In
the short run in a model with sticky prices, a monetary surprise affects labor
demand and real output.
4. In
the long run in a model with sticky prices, a monetary surprise affects labor
demand and real output.
5. A
new Keynesian model produces a countercyclical pattern of the average product
of labor while in the data the average product of labor is weakly procyclical.
6. In
the new Keynesian model, an increase in household consumption will increase
output by more than the original increase in consumption.
7. In
the new Keynesian model, a monetary expansion will decrease output in the short
run.
8. In
a model with imperfect competition, a firm will set its price equal to its
nominal marginal cost.
9. In
the Keynesian model with sticky nominal wages, the nominal wage rate is fixed
above its market-clearing value.
10. In
the Keynesian model with sticky nominal wages, a monetary expansion does not
affect the real wage rate.
11. The
Federal Funds rate is determined in the market for bonds issued by the U.S.
Treasury.
MULTIPLE CHOICE
1. Menu
costs are:
a. the posted prices of a firm. c. are
set by the government.
b. the costs of changing prices. d. are
the long run costs of the firm.
2. Sticky
prices are:
a. real prices that do not rapidly respond
to changed circumstances. c. nominal prices that do not rapidly
respond to changed circumstances.
b. prices set by government. d. prices
that can never be changed.
3. In
the model of price setting, the demand for the firms product is:
a. positively related to real income in
the economy. c. negatively related to the real wage the
firm pays.
b. positively related to the firms price
relative to the price level. d. all of the above.
4. In
the model of price setting, the demand for the firms product is:
a. negatively related to real income in
the economy. c. negatively related to the real wage the
firm pays.
b. negatively to the firms price relative
to the price level. d. all of the above.
5. A
firm’s markup ratio is:
a. its price relative to the price level. c. it
price relative to its marginal costs.
b. the price level relative to its
marginal costs. d. its marginal cost relative to the price
level.
6. In
the model of price setting, the demand for the firm’s price is:
a. positively related to the markup ratio. c. negatively
related to the firm’s marginal product of labor.
b. positively related to the nominal wage
the firm pays. d. all of the above.
7. In
the model of price setting, the demand for the firm’s price is:
a. positively related to the markup ratio. c. positively
related to the firm’s marginal product of labor.
b. negatively related to the nominal wage
the firm pays. d. all of the above.
8. In
the model of price setting, the demand for the firm’s price is:
a. negatively related to the markup ratio. c. positively
related to the firm’s marginal product of labor.
b. positively related to the nominal wage
the firm pays. d. all of the above.
9. In
the model of price setting, the demand for the firm’s price is:
a. negatively related to the markup ratio. c. negatively
related to the firm’s marginal product of labor.
b. negatively related to the nominal wage
the firm pays. d. all of the above.
10. In
the model with sticky prices, in the
short run a positive monetary shock leads to:
a. an increase in household real money
balances. c. no change in household’s desired real
money balances.
b. an increase in household’s demand for
goods. d. all of the above.
11. In
the model with sticky prices, in the
short run a positive monetary shock leads to:
a. an increase in household real money
balances. c. an increase in house hold’s desired
real money balances.
b. a decrease in household’s demand for
goods. d. all of the above.
12. In
the model with sticky prices, in the short run a positive monetary shock leads
to:
a. a decrease in household real money
balances. c. a decrease in household’s desired real
money balances.
b. an increase in household’s demand for
goods. d. all of the above.
13. In
the model with sticky prices, in the short run a positive monetary shock leads
to:
a. a decrease in household real money
balances. c. no change in household’s desired real
money balances.
b. a decrease in household’s demand for
goods. d. all of the above.
14. In
a model with sticky prices, a positive monetary shock would cause households:
a. to spend more to try to get rid of the
excess money. c. to change optimal real money balances.
b. to
want to hold more money. d. all of the above.
15. In
the model with sticky prices, in the
short run a positive monetary shock leads to:
a. an increased supply of labor. c. a
higher marginal product of labor.
b. an increased demand for labor. d. all
of the above.
16. In
the short run with a model with sticky prices a positive monetary surprise:
a. increases labor demand. c. increases
the real wage.
b. increases real output. d. all
of the above.
17. In
the short run with a model with sticky prices a positive monetary surprise:
a. increases labor demand. c. leaves
the real wage unchanged.
b. decreases real output. d. all
of the above.
18. In
the short run with a model with sticky prices a positive monetary surprise:
a. decreases labor demand. c. leaves
the real wage unchanged.
b. increases real output. d. all
of the above.
19. In
the short run with a model with sticky prices a positive monetary surprise:
a. decreases labor demand. c. increases
the real wage.
b. decreases real output. d. all
of the above.
20. In
the short run with a model with sticky prices a negative monetary surprise:
a. decreases labor demand. c. decreases
the real wage.
b. decreases real output. d. all
of the above.
21. In
the short run with a model with sticky prices a negative monetary surprise:
a. decreases labor demand. c. increases
the real wage.
b. increases real output. d. all
of the above.
22. In
the short run with a model with sticky prices a negative monetary surprise:
a. increases labor demand. c. increases
the real wage.
b. decreases real output. d. all
of the above.
23. In
the short run with a model with sticky prices a negative monetary surprise:
a. increases labor demand. c. decreases
the real wage.
b. increases real output. d. all
of the above.
24. In
the short run in a model with sticky prices:
a. the labor input is procyclical. c. the
real wage rate in procyclical.
b. the average product of labor is
countercyclical. d. all of the above.
25. In
the short run in a model with sticky prices:
a. the labor input is procyclical. c. the
real wage rate in countercyclical.
b. the average product of labor is
procyclical. d. all of the above.
26. In
the short run in a model with sticky prices:
a. the labor input is countercyclical. c. the
real wage rate in countercyclical.
b. the average product of labor is
countercyclical. d. all of the above.
27. In
the short run in a model with sticky prices:
a. the labor input is countercyclical. c. the
real wage rate in procyclical.
b. the average product of labor is
procyclical. d. all of the above.
28. In
the long run in a model with sticky prices:
a. prices will adjust. c. increase
in prices reverse the short run effects.
b. money is neutral. d. all
of the above.
29. In
the long run in a model with sticky prices:
a. prices will adjust. c. the
short run effects persist.
b. money still affects output. d. all
of the above.
30. In
the long run in a model with sticky prices:
a. prices remain sticky. c. the
short run effects persist.
b. money is neutral. d. all
of the above.
31. In
the long run in a model with sticky prices:
a. prices remain sticky. c. increase
in prices reverse the short run effects.
b. money affects production. d. all
of the above.
32. In
a new Keynesian model:
a. money is procyclical and money is weakly
procyclical in the data. c. the average product of labor is
countercyclical while the average product of labor is weakly procyclical in the
data.
b. the price level is countercyclical and
the price level is countercyclical in the data. d. all of the above.
33. In
a new Keynesian model:
a. money is procyclical and money is
weakly procyclical in the data. c. the average product of labor is
procyclical while the average product of labor is countercyclical in the data.
b. the price level is procyclical and the
price level is procyclical in the data. d. all of the above.
34. In
a new Keynesian model:
a. money is countercyclical and money is
weakly countercyclical in the data. c. the average product of labor is
procyclical while the average product of labor is countercyclical in the data.
b. the price level is countercyclical and
the price level is countercyclical in the data. d. all of the above.
35. In
new Keynesian model:
a. money is countercyclical and money is
weakly countercyclical in the data. c. the average product of labor is
countercyclical while the average product of labor is weakly procyclical in the
data.
b. the price level is procyclical and the
price level is procyclical in the data. d. all of the above.
36. In
a new Keynesian model an increase in aggregate demand causes:
a. an increase in real production greater
than the increase in aggregate demand. c. an increase in real production less
than the increase in aggregate demand.
b. an increase in real production equal to
increase in aggregate demand. d. a decrease in real production.
37. In
a new Keynesian model a temporary increase in output could be cause by:
a. a positive monetary surprise. c. a
positive shock to government purchases.
b. households becoming exogenously more
thrifty. d. all of the above.
38. In
a new Keynesian model a temporary increase in output could be cause by:
a. a positive monetary surprise. c. a
negative shock to government purchases.
b. households becoming exogenously less
thrifty. d. all of the above.
39. In
a new Keynesian model a temporary increase in output could be cause by:
a. a negative monetary surprise. c. a
negative shock to government purchases.
b. households becoming exogenously more
thrifty. d. all of the above.
40. In
a new Keynesian model a temporary increase in output could be cause by:
a. a negative monetary surprise. c. a
positive shock to government purchases.
b. households becoming exogenously less
thrifty. d. all of the above.
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