The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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Banks with excess reserves will supply more reserves to the federal funds market as the interest rate increases
Indicate whether the statement is true or false
Under the assumptions of the new Keynesian model, an increase in aggregate demand will
A) increase prices and output in the short-run. B) lead to a decrease in unemployment and an increase in prices in the short run. C) lead to an increase in the nominal wage rate in the long run and a decrease in unemployment in the short run. D) All of the above are correct.
Governments that steal from their own citizens are known as ________
A) pure democracies B) kleptocracies C) Mugabes D) antediluvians
What should affect the fundamental value of a stock according to the efficient markets hypothesis?
What will be an ideal response?