The natural rate of interest falls with a __________ shift of the __________ curve
A) rightward; IS
B) rightward; LM
C) leftward; IS
D) leftward; LM
C
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The opportunity cost of owner-provided labor is the
A) wage rate paid to the owner. B) explicit part of the wage rate paid to the owner. C) salary the owner could have made if she worked at her best alternative job. D) profit after all of the bills have been paid.
Suppose that after disposable income increases by $500 billion, consumption expenditures increase by $450 billion. Therefore, the marginal propensity to consume would be
a. 1.11 b. 9.00 c. 0.09 d. 0.90 e. 0.82
For a number of years country A had inflation of 3% but for the last five years has had inflation of 6%. Country B had inflation of 4% for many years, but very recently inflation unexpectedly rose to 9%. Other things the same, in which of the countries would the higher inflation rate be more likely to reduce unemployment?
a. both country A and country B b. neither country A nor country B c. country A but not country B d. country B but not country A
The Fed
A) can easily distinguish the minor ups and downs of the economy from a recession. B) can have difficulty distinguishing the minor ups and downs of the economy from a recession. C) always times its policy responses correctly. D) can easily determine if a drop in production means a recession is inevitable.