The federal spending policies of the Great Depression were clearly expansionary and helped return the U.S. economy to the low levels of unemployment experienced during the 1920s
Indicate whether the statement is true or false
False (Expansionary fiscal policy did not succeed on either one of these fronts.)
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A small business owner has a line of credit from a bank with a nominal interest rate of seven percent
For several years, the price level has been rising at an annual rate of two percent, but the owner has just read in the newspaper that economists expect next year's inflation rate to be four percent or more. Assume that this owner may either continue the line of credit at seven percent, or renegotiate to alter both the size of the credit and the interest rate. What reason might there be for the owner to keep the credit terms as is? What argument might justify changing the credit agreement?
The net exports effect is the direct relationship between net exports and the price level of an economy
a. True b. False Indicate whether the statement is true or false
The supply and demand for money intersect at the equilibrium real interest rate, while the supply and demand curves for loanable funds intersect at the equilibrium real interest rate
a. True b. False Indicate whether the statement is true or false
Everything else being equal, a job in which workers face a relatively small chance of being laid off would generally have
a. a lower wage rate b. a higher wage rate c. more fringe benefits d. higher skill requirements e. no expected wage differentials in equilibrium