Classical economists believe that in the short run, in the real world:
A. prices are flexible but wages were not flexible.
B. prices and wages are flexible.
C. wages are flexible but prices were not flexible.
D. prices and wages aren't flexible enough to bring about equilibrium.
Answer: D
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When the Fed changes the quantity of money, there is an immediate effect on
A) the inflation rate but not the price level. B) the nominal interest rate. C) real GDP. D) the price level and the inflation rate. E) the price level but not the inflation rate.
Refer to Figure 4.1. All else equal, a decrease in the government's budget deficit will cause
A) a shift from S1 to S2. B) a shift from S2 to S1. C) a change in the interest rate from r2 to r1. D) a change in loanable funds from L2 to L1.
The business cycle is:
A. the term used to describe fluctuations in output around its long-term trend. B. the length of time required by a firm to buy inputs and produce and sell output. C. regular and predictable. D. the pattern of increases and decreases in the money supply.
In 2016 the U.S. dollar was involved in 88 percent of all foreign exchange transactions.
Answer the following statement true (T) or false (F)