An increase in the expected rate of inflation is most likely to cause an increase in ________
A) the ex post real interest rate
B) the ex ante real interest rate
C) the nominal interest rate
D) the expected real interest rate
E) none of the above
C
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When negative externalities are present in a market, it means that:
A. private costs are less than social costs. B. private costs are less than external costs. C. social costs are less than external costs. D. external costs are equal to social costs.
If a firm is a price taker, then it can
a. sell below the market price and increase its economic profit b. sell all it wants at the market price c. sell above the market price and increase its economic profit d. supply the entire market e. choose its own price
If the index of leading indicators and other forecasting devices suggested that the economy is moving into an inflationary boom, activists' economic policy would call for
a. a decrease in money supply growth and a tax increase. b. an increase in money supply growth and a shift toward a budget deficit. c. an increase in money supply growth and a tax decrease. d. a continuation of the policies already in place.
A "lean against the wind" policy says the government should not use stabilization policy and simply let the economy "weather the storm."
a. True b. False Indicate whether the statement is true or false