According to the rational expectations theory, when the economy is at its long-run equilibrium output level, fully anticipated fiscal and monetary policies will affect the unemployment rate but not the inflation rate
a. True
b. False
Indicate whether the statement is true or false
False
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The following are all final goods EXCEPT
A) flour used by the baker to make cupcakes. B) bread eaten by a family for lunch. C) pencils used by a 6th grader in class. D) Nike shoes used by a basketball player. E) a computer used by Intel to design new computer chips.
In a large open economy, what is the source of the domestic supply of loanable funds?
A. Net capital outflow B. National saving and investment C. National saving D. Investment
An most important service provided by underwriters is
A) lowering of information costs. B) dealing with problems of moral hazard. C) insuring firms against loss from fire. D) insuring firms against loss from employee theft.
If the Federal Reserve unexpectedly increases the money supply, which of the following will most likely happen in the short run?
a. real GDP will rise. b. real GDP will fall. c. real interest rates will rise. d. the budget deficit will rise.