The Phillips curve traces a set of combinations of rates of
a. interest and unemployment
b. real GDP and inflation
c. real GDP and interest
d. inflation and interest
e. unemployment and inflation
E
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During World War II, the economic boom that raised U.S. equilibrium income above potential income:
A. eliminated any structural deficit. B. increased the cyclical deficit. C. increased the structural deficit. D. eliminated any cyclical deficit.
Suppose individuals wish to obtain the most accurate comparison of living standards between the Canada and Saudi Arabia. To do so, one would convert Saudi Arabian output into dollars using
A) the current nominal exchange rate. B) the current real exchange rate. C) the prior year's real exchange rate. D) an average of the last five years' exchange rates. E) purchasing power parity methods.
Suppose there was a debate regarding student financial aid budgets and the Democrat was arguing for a budget increase from $40 billion to $50 billion and the Republican was arguing for the budget to increase to only $41 billion. Further, suppose college costs were project to rise 10%, even with the same number of students. The Democrat accuses the Republican of proposing a cut to education while, the Republican insists his plan increases education spending. What is going on here?
A. The Republican is cutting education only if you use baseline budgeting. B. Both are proposing cuts. They are both lying, regardless of budgeting technique. C. The Republican is cutting education only if you use current services budgeting. D. Both are proposing increases. The Democrat is lying, regardless of budgeting technique.
When the Fed buys securities from the public, banks' reserves ________ and the quantity of money ________
A) increase; increases B) increase; decreases C) decrease; increases D) decrease; decreases E) do not change; increases