Suppose the inflation rate target is "0" and the long run federal funds target is also "0." Calculate the federal funds rate if the current inflation rate is 5% and real output is 4.5% below trend output
A) 2.25% B) 5.25% C) 0.5% D) 0.25%
B
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While falling prey to the seductive ways of Catwoman, Batman sacrifices the opportunity of protecting Gotham City from a crime spree initiated by the Joker. That foregone opportunity is a(n) ________ cost of (yet again) falling prey to Catwoman
A) monetary B) explicit C) sunk D) implicit
Tennis balls and tennis rackets are complements. If a 3 percent change in the price of a tennis racket leads to a 9 change in the quantity of tennis balls demanded, the cross elasticity of demand equals
A) 3. B) -3. C) 1/3. D) -1/3. E) 9.
According to classical economics:
a. real GDP is determined by aggregate demand, while the equilibrium price level is determined by aggregate supply. b. both real GDP and price level are determined by aggregate demand. c. both real GDP and price level are determined by aggregate supply. d. real GDP is determined by aggregate supply, while the equilibrium price level is determined by aggregate demand. e. price level cannot be changed as prices and wages are perfectly rigid.
Suppose the U.S. GDP growth rate is faster relative to other countries' GDP growth rates. U.S. imports will therefore increase faster than U.S. exports, and this will
A) move the economy up along a stationary aggregate demand curve. B) move the economy down along a stationary aggregate demand curve. C) shift the aggregate demand curve to the left. D) shift the aggregate demand curve to the right.