Interest rates increased continuously during the 1970s. The most likely explanation is
A) banking failures that reduced the money supply.
B) a rise in the level of income.
C) the repeated bouts of recession and expansion.
D) increasing expected rates of inflation.
D
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If a very small country trades with a very large country according to the Ricardian model, then
A) the small country will suffer a decrease in economic welfare. B) the large country will suffer a decrease in economic welfare. C) the small country only will enjoy gains from trade. D) the large country will enjoy gains from trade. E) both countries will enjoy equal gains from trade.
If the demand for a good falls when income falls, then the good is called an inferior good
a. True b. False Indicate whether the statement is true or false
A measure of GDP in which quantities produced are valued at the prices of a fixed base year is called:
A. current GDP. B. real GDP. C. nominal GDP. D. base GDP.
If the Fed purchases federal government bonds on the open market, bank reserves will
A) decrease leading to a decrease in the money supply. B) increase leading to a decrease in the money supply. C) increase leading to an increase in the money supply. D) decrease leading to an increase in the money supply.