MACROECONOMICS FINAL
EXAM
75+ (Latest 2025-2026 Edition) 100% Verified Q&A + Answer Key
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,Question 1
If two economies are identical, but one economy starts with a lower initial level of capital per worker (k1),
then the steady-state level of income per worker in the economy with the lower k1:
A) will be at a higher level than in the steady state of the higher k1
B) will be at a lower level than in the steady state of the higher k1
C) will be at the same level as in the steady state of the higher k1
D) None of the choices
Correct Answer
C) will be at the same level as in the steady state of the higher k1
Question 2
The unemployment insurance system may be desirable because unemployment insurance:
A) raises the natural rate of unemployment
B) reduces the rate of job finding
C) induces workers to reject unattractive job offers
D) increases workers' uncertainty about their incomes
Correct Answer
C) induces workers to reject unattractive job offers
Question 3
If wage rigidity holds the real wage above the equilibrium level, an increase in the demand for labor will
__________ the number unemployed.
A) possibly increase, decrease, or leave unchanged
B) increase
C) decrease
D) not change
Correct Answer
C) decrease
, Question 4
If the steady-state rate of unemployment equals 0.125 and the fraction of unemployed workers who find
jobs each month is 0.56, then the fraction of employed workers who lose their jobs each month must be:
A) 0.435
B) 0.125
C) 0.22
D) 0.08
Correct Answer
D) 0.08
Question 5
If the per-worker production function is given by y = k1/2, the saving ratio is 0.2, and the depreciation rate
is 0.1, then the steady-state ratio of output per worker is:
A) 3
B) 4
C) 2
D) 1
Correct Answer
C) 2
Question 6
The one-to-one relation between the inflation rate and the nominal interest rate, the Fisher effect,
assumes that the:
A) velocity is constant
B) real interest rate is constant
C) inflation rate is constant
D) money supply is constant
Correct Answer
B) real interest rate is constant
EXAM
75+ (Latest 2025-2026 Edition) 100% Verified Q&A + Answer Key
Solutions
100% Guarantee Pass
✓ This Exam contains: Macroeconomics Final Exam
✓ 100% Accurate Questions and Answers
✓ 100% Guarantee Pass - Verified by Experts
✓ Each Question Includes The Correct Answer
✓ Expert-Verified
,Question 1
If two economies are identical, but one economy starts with a lower initial level of capital per worker (k1),
then the steady-state level of income per worker in the economy with the lower k1:
A) will be at a higher level than in the steady state of the higher k1
B) will be at a lower level than in the steady state of the higher k1
C) will be at the same level as in the steady state of the higher k1
D) None of the choices
Correct Answer
C) will be at the same level as in the steady state of the higher k1
Question 2
The unemployment insurance system may be desirable because unemployment insurance:
A) raises the natural rate of unemployment
B) reduces the rate of job finding
C) induces workers to reject unattractive job offers
D) increases workers' uncertainty about their incomes
Correct Answer
C) induces workers to reject unattractive job offers
Question 3
If wage rigidity holds the real wage above the equilibrium level, an increase in the demand for labor will
__________ the number unemployed.
A) possibly increase, decrease, or leave unchanged
B) increase
C) decrease
D) not change
Correct Answer
C) decrease
, Question 4
If the steady-state rate of unemployment equals 0.125 and the fraction of unemployed workers who find
jobs each month is 0.56, then the fraction of employed workers who lose their jobs each month must be:
A) 0.435
B) 0.125
C) 0.22
D) 0.08
Correct Answer
D) 0.08
Question 5
If the per-worker production function is given by y = k1/2, the saving ratio is 0.2, and the depreciation rate
is 0.1, then the steady-state ratio of output per worker is:
A) 3
B) 4
C) 2
D) 1
Correct Answer
C) 2
Question 6
The one-to-one relation between the inflation rate and the nominal interest rate, the Fisher effect,
assumes that the:
A) velocity is constant
B) real interest rate is constant
C) inflation rate is constant
D) money supply is constant
Correct Answer
B) real interest rate is constant
