The relationship between the growth rate of an economic variable, gt, and its level, yt, can be approximated by A) gt = yt - yt - 1. B) gt = logt - log yt - 1. C) yt = log gt - log gt - 1. D) log gt = yt - yt - 1.
11) The relationship between the growth rate of an economic variable, gt, and its level, yt, can be approximated by
A) gt = yt - yt - 1.
B) gt = logt - log yt - 1.
C) yt = log gt - log gt - 1.
D) log gt = yt - yt - 1.
12) The business cycle component of the log of real per-capita GNP is equal to
A) log of actual real GNP - log of trend GNP.
B) log of trend GNP ÷ log of actual real GNP.
C) log of trend GNP - log of actual real GNP.
D) log of actual real GNP ÷ log of trend GNP.
13) For the study of
A) trend GNP; trend GNP
B) trend GNP; deviations from trend in GNP
C) deviations from trend in GNP; trend GNP
D) deviations from trend in GNP; deviations from trend in GNP
14) Over the twentieth century, growth in per-capita GNP was highest
A) immediately prior to the Great Depression.
B) during World War II.
C) during the 1960s.
D) during the 1980s.
15) When we say the U.S. economy has grown on average at 2.1%, we mean
A) the inflation rate.
B) the growth rate of nominal
C) the growth rate of per-capita nominal GDP.
D) the growth rate of per-capita real GDP.
16) A useful
A) is extremely realistic.
B) is simple.
C) never generates testable hypotheses.
D) provides a lot of intricate details.
17) Macroeconomic models are
A) never wrong.
B) accurate descriptions of the economy.
C) simple abstractions of reality.
D) consistent with all economic data.
18) The structure of a macroeconomic model involves all of the following except
A) the available technology.
B) the
C) the preferences of consumers.
D) the available resources.
19) What characterizes a competitive equilibrium?
A) Markets are rationed.
B) Governments stay out of the market.
C) Economic agents are price-takers.
D) It is costly to experiment with policies.
20) What do we assume about households and firms?
A) They act irrationally.
B) They do what the government tells them to do.
C) They look after each other.
D) They optimize.
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