Why has nominal GDP increased historically more rapidly than real GDP in the United States?
a. because of inflation
b. because of deflation
c. because of statistical discrepancies
d. because of high interest rates
a
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According to this Application, the recession in 1981 was caused by
A) the government cutting back on aggregate demand to reduce inflation. B) increasing oil prices which resulted in a decrease in aggregate supply. C) massive immigration from Europe to the United States. D) an decrease in aggregate supply resulting from U.S. bank collapses.
What is an advantage of using options instead of forward contracts when hedging against exchange-rate risk?
What will be an ideal response?
Effective signals
a. convey useful information from informed parties to uninformed parties. b. impose little or no cost on the signaler. c. cannot be conveyed accurately when there is an information asymmetry. d. raise the quantity sold but reduce the price sellers receive.
Which of the following is a difference between the Keynesian and classical models?
a. Price stickiness is considered in the Keynesian model but not in the classical model. b. Input prices are completely flexible in the Keynesian model but are inflexible in the classical model. c. The overall price level can change in the Keynesian model but not in the classical model. d. Input prices adjust quickly to economic changes in the Keynesian model but not in the classical model.