Zero lower bound refers to the fact that
A) the government budget deficit must be zero in the long run.
B) the lowest possible level of the current account deficit is zero in the long run.
C) the inflation rate can never decline below zero.
D) nominal interest rates cannot fall below zero.
D
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Rising interest-rate risk
A) increased the cost of financial innovation. B) increased the demand for financial innovation. C) reduced the cost of financial innovation. D) reduced the demand for financial innovation.
The output gap of zero indicates that
A) nominal GDP is equal to Real GDP. B) GDP is equal to GNP. C) the balance between unemployment and inflation has been reached. D) actual real GDP is equal to natural real GDP.
Ceteris paribus, if the price of jet fuel fell, what effect would it have on the market for air travel?
a. an increase in equilibrium price and an increase in equilibrium quantity. b. an increase in equilibrium price and a decrease in equilibrium quantity. c. a decrease in equilibrium price and an increase in equilibrium quantity. d. a decrease in equilibrium price and a decrease in equilibrium quantity.
Which of the following expresses the trade deficit?
a. Exports / imports. b. Exports + imports. c. Exports > imports. d. Imports > exports. e. Imports / exports.