If we look at real and nominal interest rates in the United States since 1971, we see that
A) the real interest rate has almost always been less than the nominal interest rate because of inflation.
B) at times the nominal interest rate has been greater than the real interest rate and at times has been less than it.
C) the difference between the nominal and real interest rates has widened during the 1990s because of inflation.
D) the nominal interest rate has always been less than the real interest rate because of inflation.
E) both the nominal and real interest rates were negative in the highly inflationary 1970s.
A
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A rightward (an outward) shift of a nation's production possibilities curve could be caused by:
a. a decrease in technology. b. an increase in resources. c. producing more consumer and fewer capital goods. d. a decline in the labor force's level of education and skills.
Supply-side economists argue that less government spending:
a. will contract the productive side of the economy. b. will result in more crowding out. c. causes higher rates of unemployment and inflation. d. would cause interest rates to increase dramatically. e. would make more investment capital available at lower rates of interest to the private sector.
Suppose you heard a person speaking about two graphs. You couldn't make out quite what they were saying, but you saw that since 1920, the variable on the left graph showed a decreasing value, and the variable on the right graph showed an increasing value. If they asserted that the left graph variable's decrease therefore caused the right variable's increase, you would be
A. not yet convinced because you understand the fallacy of composition. B. correctly convinced that they were wrong. C. convinced of the soundness of their argument. D. not yet convinced because you understand that causation and correlation are not the same.
The Smoot-Hawley Act:
A. bound the world's nations to a gradual process of tariff reduction. B. established very high tariffs on goods imported to the United States. C. exempted American exporters from the Sherman Antitrust Act. D. established the reciprocal trade agreements program.