Keynesian economists tend to hold more sway in Washington, D.C. than Real Business Cycle theorists, because _______.

a) Of the incentives of elected officials

b) Keynesians advocate for lower taxes

c) RBC theory has been proven wrong

d) Keynesians tend to be concentrated at coastal universities

According to your professor, recessions

a) Are not well understood by economists, because controlled experiments are impossible in macroeconomics

b) Can be understood as typically resulting from "boom-bust" cycles caused by expansionary Fed policies

c) Have little costs in terms of social welfare

d) Are a more important policy concern than long-run economic growth

Gross domestic product is the market value of

a)final goods and services produced within a country during the course of a year.

b) intermediate exchanges made within a country during the course of a year.

c) all monetary transactions within a country during the course of a year.

d) all the goods produced within a country during the course of a year over and above what is required to maintain the population and the stock of capital.

The law of demand applies to

a) clean air

b) clean water

c)clean streets

d) the maintenance of endangered species

A function like the square root or natural logarithm provides a more realistic representation of utility than does a linear function or an exponential function because:

a) The former exhibit diminishing marginal utility

b) The latter exhibit diminishing marginal utility

c) The former are more mathematically tractable

d) The former do not imply risk aversion