Persistently expansionary monetary policy that stimulates aggregate demand and leads to inflation will
a. lead to higher rates of real output in the long run.
b. fail to increase real output once decision makers fully anticipate the inflation.
c. lead to lower nominal interest rates once decision makers fully anticipate the inflation.
d. permanently reduce the rate of unemployment below its natural rate.
B
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The nominal wage is the wage rate adjusted for changes in the price level
Indicate whether the statement is true or false
The natural rate of unemployment:
A) is a constant. B) is the average of the unemployment rate in a country over time. C) is determined by adding the unemployment rates in all countries and then dividing it by the number of countries. D) is always lesser than the level of cyclical unemployment in an economy.
Always There Wireless is wireless monopolist in a rural area. There are 200 customers, each of whom has a monthly demand curve for wireless minutes of Qd = 200 - 100P, where P is the per-minute price in dollars and Q is the number of wireless minutes. The marginal cost of providing the wireless service is $0.25 per minute. If Always There charges $0.25 per minute, how many minutes will each customer buy each month?
A. 175 B. 200 C. 2 D. 225
A recent development in the RBC literature is the growing admission of the possible importance of
A) nominal variables. B) real demand shocks. C) favorable supply shocks. D) changes in monetary policy. E) technological changes.