In choice sets, intertemporal budget constraints illustrate consumption trade-offs over time.
Answer the following statement true (T) or false (F)
True
Rationale: Intertemporal budget constraints illustrate consumption trade-offs over time.
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
The debts one owes are called:
A. liability. B. capital loss. C. asset. D. investment.
If the real exchange rate rises 4%, domestic inflation is 2%, and foreign inflation is 0%, what is the percent change in the nominal exchange rate?
A) 6% B) 4% C) 2% D) 0%
Based on the graph above, suppose the economy is at point 2, then output falls to 10 and there is a price shock of one percent. The inflation rate next period will be ________ percent
A) 5 B) 3.5 C) 4.5 D) 4 E) none of the above