From 1945 to 1995, the debt—GDP ratio in the United States
A) steadily fell.
B) steadily increased.
C) fell from 1945 until around 1970 and rose thereafter.
D) fell from 1945 until around 1980 and rose thereafter.
D
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Suppose the natural unemployment rate is 4 percent and the expected inflation rate is 6 percent. In the figure below, illustrate the long-run Phillips curve
What does the long-run Phillips curve reveal abut the long-run tradeoff between inflation and unemployment?
A negative supply shock in the short run causes
A) unemployment to fall. B) the aggregate supply curve to shift to the left. C) equilibrium real GDP to rise. D) the price level to fall.
During the expansion phase of the business cycle, business firms become optimistic about their future earning capacity as do banks. Nominal interest rates rise during expansions. Investment lending could be expected to
A) rise if the change in future earnings is thought to be greater than the change in interest rates. B) stay the same. C) fall. D) fall if the change in future earnings is thought to be greater than the change in interest rates.
Economic variables whose values are measured in goods are called
a. dichotomous variables. b. nominal variables. c. classical variables. d. real variables.