In 2014 and 2015, GDP growth slowed because of unusually cold weather in the Midwest and North East. In the Real Business Cycle framework, we would depict this as an inward shift of the which would result in inflation and Real GDP Growth.

In the New Keynesian model, where prices are slow to adjust, a negative shock to consumer confidence will lead to                    in the short run.

Marquez, a laid-off steel worker, has recently moved to Florida because he is looking to take classes and obtain new skills in computer programming while he looks for a job in IT. Which of the following best describes Marquez’s employment situation?

The federal government spends the LEAST on which of the following programs?

You have exactly $300 in your piggy bank. You drop it, it breaks, and your money flies everywhere. You start by picking up the larger bills. At the end of the first hour, you’ve collected $200. You then turn to the smaller bills. At the end of the second hour, you’ve collected another $98. What remains are the coins. You estimate that you can pick the coins up by spending a third hour searching. If you value your time at $5 per hour, is that worth doing?

Refer to the figure above. In the figure, assume the initial real growth rate of the economy is 3% (at it’s potential growth rate) when a negative aggregate demand shock shifts the AD curve from to . As a result, the Fed responds by increasing the money supply such that spending growth increases by exactly 10 percentage points. Which of the following is TRUE about the Fed’s policy response?

If a country’s saving preference increased from 20 percent to 25 percent of disposable income and it was operating at its steady-state before the change, we would expect to see                      in the steady-state per capita capital stock and                        in the steady-state level of real GDP per capita (Draw the graph!).

In the short run, if the Fed responds to a negative real shock by raising the growth rate of money supply, inflation will be:

According to the Solow model, the reason the United States has experienced sustained economic growth for over 200 years is mostly due to which of the following?

Gross Domestic Product (GDP) is the market value of: