Once people believe the Fed's commitment to keep unemployment at the natural rate, the Fed can reduce unemployment below the natural rate
A) in both the short run and the long run.
B) in both the short run and the long run, but only after changing peoples' expectations.
C) in the long run, but not the short run.
D) in the short run, but not in the long run.
E) none of the above
D
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Which of the following was an objective of the framers of the Federal Reserve System?
A) Decentralized power B) Executive branch power C) Elimination of private-sector influence D) Consolidation of the banking industry
Which of the following is a reason why a country barely at subsistence levels cannot achieve growth very easily?
a. It cannot decrease capital goods in order to increase consumption goods. b. The lower income means that Say's law does not apply here. c. Too much savings exist and therefore it remains underutilized. d. It cannot decrease consumption goods in order to increase capital goods. e. It cannot decrease capital goods in order to also decrease consumption goods.
Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when
a. neither person faces trade-offs. b. the frontiers are straight lines. c. the frontiers are bowed out. d. they choose not to trade with one another.
The Mexican peso crisis of 1994 and 1995 was directly related to
A) a large capital account surplus. B) a large capital account deficit. C) an undervalued peso. D) a large current account surplus.