The Fed has control over the long-term real interest rate provided that three variables remain unchanged. These three variables include all of the following except
A) the expected rate of inflation.
B) the default premium.
C) term structure effects.
D) the short-term real interest rate.
D
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According to this Application, during the late 1980s, Argentina pegged its currency to the U.S. dollar. When the dollar appreciated sharply on world markets after 1995, this caused a large trade deficit in Argentina because
A) Argentina could no longer afford to purchase as many imported products. B) Argentinean exports grew relative to the nation's imports. C) U.S. exports to Argentina declined. D) Argentinean exports became relatively more expensive in global markets.
When tastes are not quasilinear, the positive economist will introduce error into the analysis if he uses the uncompensated (rather than the compensated) demand curve to analyze changes in consumer surplus.
Answer the following statement true (T) or false (F)
Other things constant, a decrease in the price of fertilizer will: a. increase the supply of wheat
b. decrease the supply of wheat. c. increase the demand for wheat. d. decrease the demand for wheat.
Suppose in 2007, nominal GDP in Clarendon was $12,840 billion and real GDP was $10,560 billion. Calculate the value of the implicit price deflator. Follow the convention of multiplying price indexes by 100.
A. 21.59 B. 82.24 C. 121.59 D. 177.57