When Fed policy is addressing either a contractionary or inflationary gap, interest rates will be changed in the same direction as the intended change in real GDP
a. True
b. False
Indicate whether the statement is true or false
False
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If a firm observes that the price of its product is above average variable cost, it would choose to continue to produce the good in the short run, even if that firm experiences economic losses
a. True b. False Indicate whether the statement is true or false
If a factory has an equal number of male and female employees, and all the male workers are more productive and are paid more than all the female workers, what does this most likely imply?
a. The wages are based on gender discrimination and sexism. b. The males all work harder than the females. c. Environmental factors have allowed the males to acquire more skills. d. Too many barriers are in place preventing females from being hired.
Which of the following would a Keynesian macro model include to describe the effect of a tax cut?
A. Multiplier spending responses. B. Interest rate rises. C. Labor supply and production responses. D. A positive relationship between interest rates and investment.
After a particular loan has been paid off, neither the borrower nor the lender has lost purchasing power. Therefore, it must be true that actual inflation was
A. greater than expected inflation. B. equal to expected inflation. C. less than expected inflation. D. greater than the nominal rate of interest.