Which of the following is an example of a fiscal policy?
a. Raising the discount rate
b. Reducing the reserve requirement
c. Reducing tax rate
d. Pegging the currency
c
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The supply of money curve is
A) vertical because the quantity of money is fixed at any one moment. B) horizontal because interest rates are fixed at any one moment. C) horizontal because the Fed controls the quantity of money supplied. D) upward sloping, showing the influence of the interest rate. E) downward sloping, showing the negative influence of the interest rate.
Refer to the figure above. What is the social surplus if the market is in equilibrium?
A) $50 B) $75 C) $100 D) $150
Assuming everything else constant, what effect will each of the following have on the long-term real interest rate?
a. The expected inflation rate decreases. b. The default-risk premium increases. c. Investors expect future short-term interest rates to fall.
Suppose an economy had an inflation rate of 7 percent last year. This has decreased to 6 percent this year. This means that the economy is: a. suffering from hyperinflation. b. experiencing deflation. c. experiencing disinflation
d. experiencing a wage-price spiral. e. experiencing a decrease in real wage.