For a given nominal interest rate, an unexpectedly high inflation rate ________ the real interest rate.
A. decreases
B. increases
C. may either increase or decrease
D. has no impact on
Answer: A
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National income equals gross domestic product
A) minus the consumption of fixed capital. B) minus government transfer payments. C) plus government transfer payments. D) plus sales taxes.
A study based on OLS regressions is internally valid if
A) the errors are homoskedastic, and there are no more than two binary variables present among the regressors. B) you use a two-sided alternative hypothesis, and standard errors are calculated using the heteroskedasticity-robust formula. C) weighted least squares produces similar results, and the t-statistic is normally distributed in large samples. D) the OLS estimator is unbiased and consistent, and the standard errors are computed in a way that makes confidence intervals have the desired confidence level.
Which of the following is true of a recession? a. It is typically accompanied by inflation and investment growth. b. It lasts for more than two years on an average
c. It is typically longer than periods of expansion. d. It begins after an expansion has peaked. e. It continues as long as actual output exceeds the potential output.
Is monetary policy more effective in recessions or inflationary periods? Explain