If the Taylor Principle is not followed and nominal interest rates are increased by less than the increase in the inflation rate, then real interest rates will ________ and monetary policy will be too ________
A) rise; tight
B) rise; loose
C) fall; tight
D) fall; loose
D
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A leftward shift of a supply curve is called a(n):
a. decrease in demand. b. increase in supply. c. decrease in supply. d. increase in quantity supplied. e. decrease in quantity supplied.
For developing countries, one of the dangers inherent in the inflows of capital that finance investment is
a. increasing unemployment that accompanies foreign investment. b. rapid outflows of funds that put pressure on exchange rates. c. the deflation that accompanies inflows of foreign capital. d. the inflation that accompanies outflows of foreign capital.
It is possible to observe a positive nominal interest rate together with a negative real interest rate
a. True b. False Indicate whether the statement is true or false
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point F
A. is efficient and attainable. B. cannot be produced with the current state of technology. C. represents underallocation of resources. D. represents what the people want.