Bob deposits $100 in a bank account that pays an annual interest rate of 5 percent. A year later, Bob withdraws his $105 . If inflation was 5 percent during the year the money was deposited, then Bob's purchasing power has not changed
a. True
b. False
Indicate whether the statement is true or false
True
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The equation underlying the mainstream view of macroeconomics is
A. S = a ? bY. B. MV = PQ. C. C + I + G + NX = GDP. D. GDP = P × Q.
The long-run aggregate supply curve intersects the horizontal axis at the:
A. actual rate of inflation. B. potential level of output. C. expected rate of inflation. D. current level of output.
An increase in the price level in the economies of U.S. trading partners will cause the aggregate expenditures function in the United States to
A. shift up. B. shift down. C. get flatter. D. get steeper.
The idea that a large national debt is "mortgaging the future of our children and grandchildren" is misleading because:
A. it is the Federal Reserve that will be responsible for making interest payments on the debt. B. future generations will have to bear the opportunity costs of the resources that are used today. C. future generations will not be liable for the interest obligations of the national debt. D. future generations will inherit the interest income as well as the interest obligations.