The opportunity cost of holding cash in your wallet
A. tends to increase as interest rates decrease.
B. is the foregone interest that could have been earned on other assets.
C. is zero.
D. None of the choices are correct.
B. is the foregone interest that could have been earned on other assets.
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In order to keep the real wage rate constant, the
A) inflation rate must be exactly one half of the expected inflation rate. B) money wage rate must increase by the same amount as the inflation rate. C) money wage rate must increase when the price level falls. D) money wage rate must decrease by the same amount as the inflation rate. E) nominal interest rate must be equal to the inflation rate.
Who would the BLS count as unemployed?
A) Anybody over 16 who doesn't have a full-time job B) Anybody over 16 who doesn't even work odd jobs C) Anybody under 65 who doesn't have a full time job D) Anybody, regardless of age, who is seeking work E) None of the above.
Refer to Figure 18-4. Rank the above panels in terms of most unequal income distribution to least unequal income distribution
A) Panel C, Panel B, Panel A B) Panel B, Panel C, Panel A C) Panel A, Panel B, Panel C D) Panel A, Panel C, Panel B
If velocity is highly unstable, then targeting the money supply
a. will be effective in stabilizing the LM curve and interest rates. b. has the same effects as targeting interest rates. c. will be ineffective in stabilizing aggregate demand. d. none of the above.