Figure 10-5
In Figure 10-5, which graph best illustrates the situation of an economy reacting to an inflationary gap through an increase in wage levels?
a.
(1)
b.
(2)
c.
(3)
d.
(4)
d
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All else equal, an increase in net exports accompanied by a decrease in expected future profits would definitely result in
A) an increase in the equilibrium real interest rate. B) a decrease in the equilibrium real interest rate. C) an increase in the equilibrium level of saving and investment. D) a decrease in the equilibrium level of saving and investment.
Equilibrium in a repeated one-stage game:
A. requires cooperation. B. does not require cooperation. C. can only be found if the game is finite. D. can only be found if the game is infinite.
Which of the following groups believes that the money supply is the critical policy lever?
A. Marxists. B. Supply-siders. C. Monetarists. D. New classical economists.
Suppose fiscal policy makers pass a budget that cuts taxes in the current period and are expected to cut taxes in the future. Use the IS-LM model to illustrate graphically and explain the effects of this policy on current output and the current interest rate
What will be an ideal response?