A price ceiling leads to a(n) ________ if below equilibrium price
A) increase in social well-being
B) increase in producer surplus
C) decrease in market demand
D) decrease in total surplus
D
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If the inflation rate target is 2%, the current inflation rate is 1%, and the output gap is minus 2%, then according to the Taylor rule, the nominal federal funds rate should be ________ percent
A) zero B) two C) four D) three E) none of the above
The claim that increases in the growth rate of the money supply increase nominal interest rates but not real interest rates is known as the
a. Friedman Effect. b. Hume Effect. c. Fisher Effect. d. the inflation tax.
The national defense argument for trade restriction holds that
A) the president should have the authority to erect trade barriers in case of war or national emergency. B) free trade is a danger to the national defense because open borders increase the likelihood that spies will get into the country. C) a country should produce those goods necessary for national defense purposes even if it doesn't have a comparative advantage in them. D) if your enemy erects trade restrictions, so should you.
A constant debt-to-GDP ratio in a growing economy is consistent with a:
A. continual surplus. B. falling level of total debt. C. balanced budget. D. continual deficit.