Sophia puts money in the bank and earns a 5 percent nominal interest rate. If the inflation rate is 2 percent, then after one year,
a. Sophia will have 3 percent more money, which will purchase 5 percent more goods.
b. Sophia will have 3 percent more money, which will purchase 7 percent more goods.
c. Sophia will have 5 percent more money, which will purchase 3 percent more goods.
d. Sophia will have 5 percent more money, which will purchase 7 percent more goods.
c
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Fully anticipated monetary policy actions cannot alter either the rate of unemployment or the level of real GDP. This statement is
A) the nonaccelerating inflation rate of unemployment theory. B) discretionary policy making. C) the policy irrelevance proposition. D) the Phillips curve.
Either an increase in the number of buyers or an increase in tastes or preferences for a good or service will increase the market demand for that good or service
a. True b. False Indicate whether the statement is true or false
In the textbook, there was a discussion of the average numbers of hours worked in the U.S. being around 34 hours per week. As you enter the work force, do you expect this number to increase or decrease?
What will be an ideal response?
Simultaneous causality
A) means you must run a second regression of X on Y. B) leads to correlation between the regressor and the error term. C) means that a third variable affects both Y and X. D) cannot be established since regression analysis only detects correlation between variables.