The consumption curve will shift upward if real asset and money holdings
a. increase, if people expect prices to increase, if interest rates decrease, and if taxes decrease
b. increase, if people expect prices to increase, if interest rates increase, and if taxes increase
c. increase, if people expect prices to increase, if interest rates increase, and if taxes decrease
d. decrease, if people expect prices to decrease, if interest rates decrease, and if taxes decrease
e. decrease, if people expect prices to increase, if interest rates increase, and if taxes decrease
A
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Refer to Figure 18-1. Suppose that the U.S. government deficit causes interest rates in the United States to rise relative to those in the European Union. Assuming all else remains constant, how would this be represented?
A) Supply would decrease, demand would decrease and the economy moves from B to C to D. B) Supply would increase, demand would decrease and the economy moves from C to B to A. C) Demand would decrease and the economy moves from B to A. D) Demand would increase and the economy moves from A to B.
The approximate probability of a value occurring that is greater than one standard deviation from the mean is approximately (assuming a normal distribution)
a. 68.26% b. 2.28% c. 34% d. 15.87% e. none of the above
Assume that during the last several years, the annual rate of inflation was 4 percent and the annual growth rate of the money supply was 5 percent. During the last 12 months, however, the monetary authorities have increased the money supply at a 12 percent annual rate. The expected inflation rate for the next period will be
a. higher than 4 percent under the rational expectations hypothesis. b. 4 percent under the adaptive expectations hypothesis. c. higher than 4 percent under both the adaptive and rational expectations hypotheses. d. both a and b.
Contractionary monetary policy
a. leads to disinflation and makes the short-run Phillips curve shift right. b. leads to disinflation and makes the short-run Phillips curve shift left. c. does not lead to disinflation but makes the short-run Phillips curve shift right. d. does not lead to disinflation but makes the short-run Phillips curve shift left.