Based on the model of the money market, when real GDP increases, the equilibrium interest rate should:
A. stay the same.
B. increase.
C. decrease.
D. increase to the same extent that the supply of money increases.
Answer: B
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Moving along the potential GDP line, when the price level changes, the
i. real wage rate stays at the full-employment equilibrium level. ii. money wage rate changes by the same percentage. iii. money prices of non-labor resources change by the same percentage. A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
Keynes rhymes with
A) beans. B) gains. C) genies. D) none of the above.
Answer the following statements true (T) or false (F)
1. Over the span of many years, a student and her family invest significant amounts of time and money into that student’s education. It is worth it, because median weekly earnings are about 10% higher for workers who have completed more education. 2. Cooperation between government-funded universities, academies, and the private sector has been shown to delay product innovation and repress whole new industries. 3. All goods and services with positive externalities are also public goods. 4. Government spending and taxes are not the only way to provide public goods. 5. Because nobody owns the ocean, or the creatures that live in it, no one has the ability to protect these resources and ensure they are responsibly harvested.
Discuss the key criteria for success and the advantages of a central bank adopting the framework of inflation targeting.
What will be an ideal response?