During periods of inflation:
a. everyone's real income rises.
b. those people who have fixed incomes benefit.
c. those people whose nominal income rises faster than the general price level benefit.
d. those people who enter long-term wage agreements benefit.
e. those people who hold a lot of cash benefit.
c
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The Taylor rule specifies
a. a constant relationship between interest rates and output. b. a constant relationship between interest rates, output, and inflation. c. a flexible relationship between interest rates, output, and inflation. d. a fixed relationship between inflation and output. e. none of the above.
A fall in real interest rates will reduce aggregate demand.
Answer the following statement true (T) or false (F)
What are the marginal propensity to consume (MPC) and the marginal propensity to save (MPS)? How is the MPC related to the consumption function?
What will be an ideal response?
Under a fixed exchange rate system, a balance of payments surplus may:
A) decrease the country's money supply if there is a non-sterilized central bank intervention. B) decrease the country's money supply if there is a sterilized central bank intervention. C) increase the country's money supply if there is a non-sterilized central bank intervention. D) increase the country's money supply if there is a sterilized central bank intervention.