During fiscal year 2012, the most recent mentioned in the text, the federal government spent approximately
a. $1.7 billion
b. $1.9 trillion
c. $3.7 trillion
d. $14.0 trillion
c
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The uncertainty costs of inflation cause ________ because ________
A) a decrease in investment and slower growth; people focus on the long run and not the short run B) an increase in investment and faster growth; people focus on the short run and not the long run C) a decrease in investment and slower growth; people increase their demand for money D) a decrease in investment and slower growth; people focus on the short run and not the long run E) an increase in investment and faster growth; people decrease their demand for money
Whether or not a pooling equilibrium exists in a competitive market with adverse selection depends on what fraction of consumers is of the high cost type and what fraction is of the low cost type.
Answer the following statement true (T) or false (F)
In the aggregate expenditures model, the equilibrium real GDP is
A. assumed to be equal to the full-employment real GDP level. B. always less than the full-employment real GDP level. C. always above the full-employment real GDP level. D. not necessarily equal to the full-employment real GDP.
Suppose there's an unanticipated increase in the rate of inflation. Which of the following is likely to be true?
a. Workers whose nominal wages are set at the beginning of the year are likely to suffer a decrease in real wages. b. Creditors who made loans based on the anticipated rate of inflation will earn a higher real interest rate than they expected. c. The real value of outstanding loan balances of debtors will increase. d. Workers whose nominal wages are set at the beginning of the year are likely to enjoy an increase in real wages.