Milton Friedman's k-percent rule says to set the rate of growth of the quantity of money equal to
A) the real interest rate.
B) a constant rate.
C) the rate of growth of potential GDP.
D) the unemployment rate.
E) last year's growth rate of real GDP.
B
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Much of the credit for prevention of a financial market meltdown after "Black Monday" (October 19, 1987 ) must be given to the Federal Reserve System and then-chairman
A) Paul Volcker. B) Alan Blinder. C) Arthur Burns. D) Alan Greenspan.
Which of the following statements is correct?
a. It is monetary policy and not tax policy that influences interest rates. b. Tax reductions play little role in influencing output. c. Marginal tax rates today are lower than they have ever been in U.S. history. d. Budget deficits show little correlation with interest rates. e. None of the above.
Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to real GDP and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). b. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). c. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). d. Real GDP and net nonreserve-related international borrowing/lending remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
If an industry consists of five firms each with a 20 percent market share, then the Herfindahl-Hirschman index would equal 1,600.
Answer the following statement true (T) or false (F)