If the central bank did not follow the Taylor principle, an increase in inflation would lead to a decrease in ________
A) the nominal interest
B) the real interest rate
C) aggregate output
D) all of the above
E) none of the above
B
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In the figure above, if the wage rate is $6 per hour, then the
A) firms' surplus is the area d + e + f. B) workers' surplus is the area a + b + c. C) deadweight loss equals zero. D) Only answers A and C are correct. E) Answers A, B, and C are correct.
Refer to Table 6-3. Over what range of prices is the demand elastic?
A) between $8 and $16 B) between $14 and $16 C) over the entire range of prices D) between $2 and $8
The bond supply and demand framework is easier to use when analyzing the effects of changes in ________, while the liquidity preference framework provides a simpler analysis of the effects from changes in income,
the price level, and the supply of ________. A) expected inflation; bonds B) expected inflation; money C) government budget deficits; bonds D) government budget deficits; money
In a market characterized by externalities, the market equilibrium fails to maximize the total benefit to society as a whole
a. True b. False Indicate whether the statement is true or false