According to the Taylor rule, the Federal Reserve ________ the real interest rate as the output gap increases and ________ the real interest rate as the inflation rate increases.
A. lowers; raises
B. raises; raises
C. lowers; lowers
D. raises; lowers
Answer: A
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The above figure shows the market for labor. The employer is a monopsony. At the equilibrium level of employment, which of the following is CORRECT?
A) MCL = VMP B) VMP > W C) W < MCL D) All of the above are correct.
Adaptive inflationary expectations are based on
A) monetary growth. B) all available information. C) previous inflation rates. D) price changes in futures markets.
Following a new deposit of $500 at a bank, drawn on funds previously held on deposit at another bank, when the reserve ratio is 10 percent, the maximum potential increase in the money supply will be
A. $5,000. B. $500. C. $0. D. $400.
In 2017, Boeing announced that it was laying off 1,800 employees in addition to the 7,000 workers it had cut the year before. The laid-off employees who were eventually able to find jobs at another aircraft manufacturer such as Airbus or Bombardier would
have been considered ________ during the time they were out of work. A) structurally unemployed B) frictionally unemployed C) seasonally unemployed D) cyclically unemployed