The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier.
B. self-correcting property.
C. short-run equilibrium property.
D. long-run equilibrium property.
Answer: B
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The limited memberships and high dollar minimums for hedge funds means that these funds are
A) subject to weaker regulation than other mutual funds. B) more stringently regulated for fear of collapse. C) limited in the types of assets they can purchase. D) under the control of the U.S. Treasury.
In IS-LM analysis, the nominal interest rate is
A) purely a monetary phenomenon. B) purely a real phenomenon. C) both a monetary and a real phenomenon. D) neither a real nor a monetary phenomenon, but determined by government policy.
The relationship between quantity supplied and price is usually
A) an inverse relationship. B) a direct relationship. C) a negative relationship. D) impossible to determine.
Which of the following factors leads to a drastic rise in the price of assets?
a. Increased supply of assets b. Increase in the market rate of interest c. Reduced demand for money d. Increased liquidity in the economy e. Contractionary monetary and fiscal policies being undertaken by the government