Which of the following statements is most correct?
A. Money growth is the result of inflation.
B. It is impossible to have high, sustained inflation without monetary accommodation.
C. There is no clear link between high, sustained inflation and the monetary aggregates.
D. The current rate of inflation is the result of money growth.
Answer: B
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Real business cycle theory explains changes in employment and output by focusing on
A) changes in fiscal policy. B) real supply-side factors. C) the interaction of fiscal and monetary policies. D) changes in monetary policy.
Refer to Figure 4-1. Kendra's marginal benefit from consuming the third ice cream cone is
A) $13.00 B) $2.50 C) $1.50 D) $0.50
When all variables start out at their long-run equilibrium levels, the most important determinant of long-run swings in nominal exchange rates is
A) a shift in relative money supply levels. B) a shift in relative money supply growth rates. C) a change in relative output demand. D) a change in relative output supply. E) a change in relative inflation rates.
In the early 2000s, there was a strong black market for Chinese yuan. It is widely held that the Chinese yuan is undervalued. Based on this information, we know that China:
A. has flexible exchange rates. B. does not allow complete convertibility of its currency. C. has partially flexible exchange rates. D. has fixed but convertible exchange rates.