Using the Taylor rule, if the current inflation rate exceeds the target inflation rate and real GDP exceeds potential GDP, then the federal funds target rate ________ the sum of the current inflation rate plus the real equilibrium federal funds rate
A) may be greater than or less than B) will be greater than
C) will be the same as D) will be less than
B
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The following table reports transactions that occurred in Whoville. Nominal GDP in Whoville is ________
Item Price per Unit Quantity Bottles of French Wine $20 10 Boxes of Cereal $4 20 Used Tires $15 5 Shares of Twitter Stock $10 15 Hours of Swimming Lessons $5 8 A) $320 B) $545 C) $120 D) $395 E) $195
Fact: The lowest 20% of U.S. family incomes in the U.S. has fallen from 4.8% to 3.8% between 1960 and 2010. Your authors argue that
A) this is clear evidence that the poor have gotten poorer. B) this is primarily the result of a general decline of the power of labor unions in America. C) while their percentage of national income has fallen, real GDP has increased over 4 times during the past 50 years, and so those persons actually earned much more income than before. D) none of the above are true.
The multiplier effect refers to the series of
A) induced increases in consumption spending that result from an initial increase in autonomous expenditures. B) autonomous increases in consumption spending that result from an initial increase in induced expenditures. C) induced increases in investment spending that result from an initial increase in autonomous expenditures. D) autonomous increases in investment spending that result from an initial increase in induced expenditures.
Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000 . The walkway is expected to reduce the risk of fatality by 1.5 percent, and the cost of a human life is estimated at $10 million. The town should
a. install the walkway because the estimated benefit is twice the cost. b. be indifferent between installing and not installing the walkway because the estimated benefit equals the cost. c. not install the walkway, since the cost is twice the estimated benefit. d. install the walkway, since the cost of even a single life is too great not to take action.