1. True/False. For a given year, real gross domestic product (GDP) is always gre
ID: 1236802 • Letter: 1
Question
1. True/False. For a given year, real gross domestic product (GDP) is always greater than nominal GDP.2. True/False. If the government increases taxes by $100 billion in a closed economy with a marginal propensity to consume equal to 0.75, private investment will decrease by $100 billion.
3. True/False. According to the neoclassical theory of distribution, a wave of immigration will increase the real rental price of capital and the real wage.
4. True/False. In a closed economy, a fiscal expansion (an increase in government expenditure or a decrease in taxes) will crowd-out private investment.
5. True/False. In a closed economy, an increase in demand in the loanable funds market will result in an increase in private investment.
6. True/False. In the country of Wiknam, the velocity of money is constant; real gross domestic product (GDP) grows by 3 percent; the money stock grows by 4 percent; and the nominal interest rate is 3 percent. The real interest rate is 1 percent.
7. True/False. In a small open economy, a fiscal expansion (an increase in government expenditure or a decrease in taxes) at home increases the real rate of interest and thus crowds out private investment.
8. True/False. In a small open economy, a fiscal expansion (an increase in government expenditure or a decrease in taxes) abroad decreases the real exchange rate and decreases the net capital outflow.
9. True/False. An increase in the rate of job separation (the fraction of employed individuals who lose or leave their job each month) increases the natural rate of unemployment.
10. True/False. By increasing wage rigidity, a minimum wage increases frictional unemployment.
Explanation / Answer
Hi, If you like my answer rate me first...that way only I can earn points. Thanks 1) False 2) False 3) True 4) False 5) True 6) True 7) False 8) False 9) False 10) True
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