Monetarists directly study the link between money and economic activity using
A) structural models.
B) reduced-form models.
C) scientific models.
D) experimental models.
B
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If the United States imports goods and services for a total of $45 billion, exports goods and services for a total of $40 billion, records $4 billion as net interest and zero as net transfers, then the U.S. current account balance is
A) $1 billion. B) -$1 billion. C) $89 billion. D) zero. E) $81 billion.
Which of the following statements is true?
a. Interest rates charged to well-known corporations are higher than rates charged to individuals because corporations can afford it. b. If people expect higher rates of inflation, the market interest rate will decrease because fewer people will borrow. c. Interest rates in unstable countries are lower than rates in stable countries. d. The risk cost of doing business in a high-crime area is greater and the cost of borrowing is, therefore, greater there. e. The lower the tax rate, the greater the cost of borrowing.
If the price of gasoline has increased from $2 per gallon to $4 per gallon at the same time that the overall price index increased from 200 to 250, then you know that the inflation adjusted price of gasoline has
A. decreased. B. increased. C. remained constant.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.