The idea that anticipated monetary policy changes cannot affect real Gross Domestic Product (GDP) or employment is known as
A. the policy irrelevance theorem.
B. the Keynesian hypothesis.
C. the systematic policy hypothesis.
D. the bounded rationality hypothesis.
Answer: A
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Use the aggregate expenditures model and the following values to answer the next question.AMPCIGT$9000.9$2,500$2,500$1,000Determine equilibrium real GDP for this economy.
A. $69,000 B. $59,000 C. $50,000 D. $60,000
If the three-month Treasury bill has an interest rate of 0.2%, the ten-tear Treasury bond has an interest rate of 2.75%, and a ten-year bond issued by Time Warner has an interest rate of 6%, what is the risk premium on Time Warner's bond?
What will be an ideal response?
Suppose you withdraw $1,000 from your checking account. If the reserve requirement is 20 percent, how does this transaction affect the supply of money and the excess reserves of your bank?
a. There is no change in the supply of money; your bank's excess reserves are reduced by $800. b. There is no change in the supply of money; your bank's excess reserves are reduced by $200. c. The money supply increases by $1,000 . and the excess reserves of your bank are reduced by $800. d. The money supply increases by $1,000 . and the excess reserves of your bank are reduced by $200.
The demand for a product is likely to be more elastic:
A. the smaller the share of the total budget spent on the product. B. when more complementary products are available. C. in the short run than in the long run. D. when more good substitutes for the product are available.