When the inflation rate of a country is high over a lengthy time period,
a. the year-to-year variability in the rate of inflation is generally small.
b. the year-to-year variability in the rate of inflation is generally large.
c. decision makers will be able to forecast future rates of inflation accurately.
d. there is no reason to believe that the inflation will exert harmful side effects on real output and the prosperity of the country.
B
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The marginal revenue product curve represents a firm's demand curve for a resource
a. True b. False
If you divide the amount of nominal GDP by the stock of money, you have computed the
a. multiplier. b. price level. c. velocity of circulation. d. inflation rate.
Exhibit 16-3 Money market demand and supply curves
As shown in Exhibit 16-3, assume the money supply curve shifts rightward from MS1 to MS2 and the economy is operating along the intermediate segment of the aggregate supply curve. The result will be a:
A. higher investment, lower real GDP, and lower price level. B. lower investment, lower real GDP, and lower price level. C. higher investment, higher real GDP, and higher price level. D. higher interest rate and no effect on real GDP or the price level.
When interest rates in the U.S. decline, we can expect net capital outflow to:
A. increase. B. be zero. C. decrease. D. be unaffected.