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Macro Test

In: Business and Management

Submitted By hluque1
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MACROECONOMICS NAME_____________
TEST 4 CHAPTERS 16,17,18,19 AND 20

Chapter 16
1) The idea of the ________ is that people make lifetime consumption plans.
A) life-cycle theory of consumption
B) invisible hand
C) law of demand
D) classical theory of investment
ANSWER: ______________

2) According to the life-cycle theory of consumption, people tend to consume ________ they earn during their early and later years.
A) more than
B) less than
C) the same as
D) an amount unrelated to what
ANSWER: ______________

3) The opportunity cost of leisure will rise if
A) the wage rate increases.
B) the wage rate decreases.
C) nonlabor income increases.
D) nonlabor income decreases.
ANSWER: ______________

4) A rise in the interest rate
A) decreases the opportunity cost of consuming today.
B) increases the opportunity cost of consuming in the future.
C) increases the opportunity cost of consuming today.
D) decreases the opportunity cost of consuming in the future.
ANSWER: ______________

5) Over time, spending on ________ is ʺsmootherʺ than spending on ________.
A) durable goods; services
B) nondurable goods; durable goods
C) services; nondurable goods
D) durable goods; service
ANSWER: ______________

6) The largest increase in the labor-force participation rate since 1950 is among
A) prime-age men.
B) teenagers over the age of 16.
C) prime-age women.
D) males in their 20s.
ANSWER: ______________

7) Which of the following is NOT a transfer payment?
A) Social Security payments
B) welfare benefits
C) unemployment compensation
D) dividends
ANSWER: ______________

8) The tendency for ________ to decrease when ________ decreases is the result of the accelerator effect. A) investment; aggregate output
B) consumption; investment
C) saving; consumption
D)…...

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