Suppose, over the past year, the real interest rate was 3 percent and the inflation rate was 1 percent
a. The dollar value of savings increased at 2 percent, and the value of savings measured in goods increased at 3 percent.
b. The dollar value of savings increased at 1 percent, and the value of savings measured in goods increased at 2 percent.
c. The dollar value of savings increased at 3 percent, and the value of savings measured in goods increased at 1 percent.
d. The dollar value of savings increased at 4 percent, and the value of savings measured in goods increased at 3 percent.
D
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Monetary policies are
A. less effective when the exchange rate is fixed and the economy is open. B. less effective when the exchange rate is flexible and the economy is open. C. more effective when the exchange rate is flexible and the economy is closed. D. more effective when the exchange rate is flexible and the economy is open.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Which of the following increases as a result of an increase in real GDP?
i. autonomous expenditure ii. induced expenditure iii. potential GDP A) i only B) ii only C) iii only D) ii and iii E) i, ii, and iii
When people who are holding the money of some other country want to exchange it for U.S. dollars, they ________ U.S. dollars and ________ that other country's money
A) demand; supply B) supply; supply C) supply; demand D) demand; demand