What effect does an increase in the nominal interest rate have on the opportunity cost of holding money and on the demand for money curve?
What will be an ideal response?
An increase in the nominal interest rate increases the opportunity cost of holding money. There is a movement upward along the demand for money curve.
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In the 1950s, about _________ of U.S. workers were in unions.
A. 1/3 B. 1/2 C. 1/4 D. 3/4
The U.S. is able to maintain a large trade deficit because:
A. it is balanced by a large capital surplus. B. when the business cycle is in a boom, it will be a trade surplus. C. it is balanced by a large capital deficit. D. None of these statements is true.
During the mid-1980s, we observed a significant reduction in oil prices. In the United States, we would expect that this reduction in oil prices would cause
A) a larger reduction in the CPI compared to the GDP deflator. B) an equal reduction in the CPI and GDP deflator. C) a larger reduction in the GDP deflator compared to the CPI. D) no change in the CPI and a reduction in the GDP deflator.
"Housing starts" is __________ indicator
A) a leading B) a coincident C) a lagging D) an inconsistent