Monetary policy can
A) shift the short-run trade-off between inflation and unemployment if it affects expected inflation.
B) shift the long-run trade-off between inflation and unemployment through changes in cyclical unemployment.
C) shift both the short-run and long-run trade-offs between inflation and unemployment if changes in policy are credible.
D) shift neither the short-run nor long-run Phillips curve trade-offs between inflation and unemployment.
A
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The law of one price
A) is a law passed by Congress that prohibits firms from selling a product at two different prices in the same market at the same time. B) states that consumers will pay any price for a product that has a perfectly inelastic demand curve. C) states that consumers can only buy one good or service at a time. D) states that identical products should sell for the same price everywhere.
If Microsoft sells a bond in London and it is denominated in dollars, the bond is a
A) Eurobond. B) foreign bond. C) British bond. D) currency bond.
The most basic concept of economics is
A. scarcity. B. shortage. C. bounded rationality. D. money.
In a fixed exchange rate regime, an increase in the price level will cause which of the following?
A) a real appreciation and a leftward shift in the aggregate demand curve B) a real appreciation and no shift in the aggregate demand curve C) a real depreciation and a rightward shift in the aggregate demand curve D) a real depreciation and no shift in the aggregate demand curve E) no change in the real exchange rate, and no change in aggregate demand