PUP 3002 - Chapter 5-8 Exam UPDATED
QUESTIONS AND CORRECT ANSWERS
Ch.5 - In the United States, what is responsible for managing the supply of money in the economy? -
CORRECT ANSWER The Federal Reserve Board
Ch.5 - _____ has to do with taxing and spending. - CORRECT ANSWER Fiscal Policy
Ch.5 - What is the Nash equilibrium of the Ultimatum game where player 1 starts with $10 and player
2 starts with $0? - CORRECT ANSWER player 1 receives $9 and player 2 receives $1
Ch.5 - The increase in the market value of the goods and services produced by an economy is -
CORRECT ANSWER economic growth.
Ch.5 - Card and Krueger (1994, 2000) studied the effects of minimum wage on employment in the
fast food industry. They found evidence that an increase to the minimum wage resulted in -
CORRECT ANSWER an increase in employment.
Ch.5 - _____ involves taking from the people who have more income and giving to the people who do
not have enough income. - CORRECT ANSWER Redistribution
Ch.5 - During a recession, the Keynesian solution is for government spending to - CORRECT
ANSWER increase.
Ch.5 - Most people receive _____ in social security benefits compared to the contributions that they
put in. - CORRECT ANSWER more
Ch.5 - Thousands of experimental studies have put to test the expectations of the Ultimatum game and
reveal that contributions are _____ the model predicts. - CORRECT ANSWER more than
Ch.5 - During a recession, the Classical solution is for government spending to - CORRECT
ANSWER decrease
QUESTIONS AND CORRECT ANSWERS
Ch.5 - In the United States, what is responsible for managing the supply of money in the economy? -
CORRECT ANSWER The Federal Reserve Board
Ch.5 - _____ has to do with taxing and spending. - CORRECT ANSWER Fiscal Policy
Ch.5 - What is the Nash equilibrium of the Ultimatum game where player 1 starts with $10 and player
2 starts with $0? - CORRECT ANSWER player 1 receives $9 and player 2 receives $1
Ch.5 - The increase in the market value of the goods and services produced by an economy is -
CORRECT ANSWER economic growth.
Ch.5 - Card and Krueger (1994, 2000) studied the effects of minimum wage on employment in the
fast food industry. They found evidence that an increase to the minimum wage resulted in -
CORRECT ANSWER an increase in employment.
Ch.5 - _____ involves taking from the people who have more income and giving to the people who do
not have enough income. - CORRECT ANSWER Redistribution
Ch.5 - During a recession, the Keynesian solution is for government spending to - CORRECT
ANSWER increase.
Ch.5 - Most people receive _____ in social security benefits compared to the contributions that they
put in. - CORRECT ANSWER more
Ch.5 - Thousands of experimental studies have put to test the expectations of the Ultimatum game and
reveal that contributions are _____ the model predicts. - CORRECT ANSWER more than
Ch.5 - During a recession, the Classical solution is for government spending to - CORRECT
ANSWER decrease
