Question

1.A quality-of-life index measures absolute poverty levels. True False 2.Assume that taxes are constant. If the...

1.A quality-of-life index measures absolute poverty levels.

True

False

2.Assume that taxes are constant. If the government borrows $17 billion in new funds and has a budget deficit of $35 billion, then the central bank has to:

increase the money supply by $17 billion.

increase the money supply by $35 billion.

reduce the money supply by $35 billion.

increase the money supply by $18 billion.

reduce the money supply by $52 billion.

3.As more women entered the labor force in the 1980s in the United States:

the quantity of output decreased.

the average quality of the labor force improved.

labor productivity increased.

the number of unskilled workers increased.

the supply of skilled labor exceeded its demand

4.A time-inconsistent monetary policy is one that:

is based on monetary targets established by law.

changes over time as economic conditions change.

does not adapt to changing economic conditions.

is set by congressional decree.

follows a zero percent inflation rate.

5.Economic growth is equal to:

growth in total factor productivity plus growth in amounts of resources.

total factor productivity minus marginal factor productivity.

total factor productivity plus amounts of resources.

real GDP plus national output.

GNP plus GDP.

6.A tariff imposed on foreign imports will cause _____.

market supply of domestic goods to decline

domestic prices of imported goods to rise

domestic prices of imported goods to fall

market supply of importable goods to increase

demand for imports to increase

7.According to the long-run Phillips curve, which of the following will be the end result of an expansionary monetary policy when unemployment is at its natural rate?

A constant level of potential real GDP

Deflation

An increase in unemployment

Zero inflation

A decrease in unemployment

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Homework Answers

Answer #1

1) FALSE . Absolute poverty is the condition where household income is below a necessary level to maintain a basic living standard , while quality of life index is an attempt to measure quality of life or well being based on certain parameters .

2) increase the money supply by $18 billion. Dearth in money supply = 35 - 17 = 18$ billion which is supplied by central bank .

3) the number of unskilled workers increased. At that time during post war period many women were unskilled and increased the unskilled labor count in the labor force .

4) Time inconsistency occurs when policymakers promise something but do not act accordingly in future because of some negative repercussions . Answer : changes over time as economic conditions change.

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