Question

Question 62 pts

An inward-oriented strategy is designed to:

lower the production of capital goods.

develop the domestic manufacturing sector.

improve productivity in the domestic service sector.

promote the consumption of imported goods.

expand a country’s export capacity.

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Question 72 pts

A sudden technological breakthrough in an economy would:

increase the price level.

have no impact on real GDP.

cause aggregate supply to rise.

lower the natural rate of unemployment.

cause aggregate demand to fall.

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Question 82 pts

A look at macroeconomic data across countries reveals that when economies experience recessions, unemployment rates rise, but wages fall very little, if at all. Which of the following is most likely to support this observation?

The demand for labor is derived demand and hence does not fall during recessions.

The labor supply curve becomes perfectly inelastic during recessions.

Wages are determined by the interaction of the forces of labor demand and supply.

Long term labor contracts make the wage rates sticky downwards.

The labor market usually exhibits perfect competition.

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Question 92 pts

A country is strongly inward-oriented if exports are clearly discouraged by controls to isolate and protect the domestic market.

True

False

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Question 102 pts

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 decrease in unemployment

A constant level of potential real GDP

An increase in unemployment

Deflation

Zero inflation