Everything else held constant, when the inflation rate is expected to rise, interest rates will ________; this result has been termed the ________
A) fall; Keynes effect
B) fall; Fisher effect
C) rise; Keynes effect
D) rise; Fisher effect
D
You might also like to view...
The entry and exit of firms in a monopolistically competitive market guarantee that
A) firms can earn economic profits in the long run. B) price equals average total cost in the long run. C) marginal revenue equals marginal cost and average total cost is minimized. D) firms can earn economic profits in the short run.
Suppose the Fed conducts an open market purchase of bonds. This monetary policy action will tend to cause
A) the price of bonds to increase, and the interest rate to increase. B) the price of bonds to increase, and the interest rate to decrease. C) the price of bonds to decrease, and the interest rate to increase. D) the price of bonds to decrease, and the interest rate to decrease.
A demand shock that increases real GDP above its full-employment level will, in the long run,
a. lead to a higher wage rate and an upward shift of the aggregate supply curve b. lead to a lower wage rate and a downward shift of the aggregate supply curve c. lead to a higher wage rate and a rightward shift of the aggregate demand curve d. lead to a lower wage rate and a leftward shift of the aggregate demand curve e. cause no further shifts in the aggregate supply or aggregate demand curve
A current account deficit is generally a result of imports exceeding exports.
a. true b. false