A country wishing to establish a currency basket peg usually
A) chooses a small number of trading partner's currencies for that basket.
B) chooses all of its trading partner's to be members of the basket.
C) chooses six trading partners for inclusion.
D) chooses only the most stable reserve currencies for inclusion.
A
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Using Taylor's rule, when the equilibrium real federal funds rate is 2 percent, there is no output gap, the actual inflation rate is zero, and the target inflation rate is 2 percent, the nominal federal funds rate should be
A) 0 percent. B) 1 percent. C) 2 percent. D) 3 percent.
Prior to the time of John Maynard Keynes, most economists stressed that
a. low levels of aggregate demand would lead to prolonged periods of unemployment. b. market economies were inherently unstable because of fluctuating aggregate demand. c. market adjustments would automatically direct an economy to full employment within a relatively brief period of time. d. budget deficits and surpluses were necessary for the control of economic fluctuations.
Excess capacity for a firm in an oligopoly situation
A. cannot contribute to long run profit for a firm. B. is a deterrent to entry in the market by potential competitors. C. will be temporary if the planning was done right. D. encourages competitors to enter the market and build at optimal capacity.
Which of the following statements about aggregate accounting is false?
A. It provides a way of measuring how much a nation is producing and consuming. B. It provides a way of measuring total, or aggregate, production. C. It is the best way to measure social welfare for an economy. D. It did not exist before the 1930s because economists focused on microeconomics before the 1930s.