The point where the central bank's target inflation rate is consistent with the long-run real interest rate lies:
A. on the monetary policy reaction curve.
B. on the horizontal (inflation) axis.
C. above the monetary policy reaction curve.
D. below the monetary policy reaction curve.
Answer: A
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In long-run macroeconomic equilibrium, the
A) real wage rate has adjusted so that the economy is on the short-run aggregate supply curve but not on the long-run aggregate supply curve. B) long-run aggregate supply curve has shifted in response to a money wage rate increase so that potential GDP equals real GDP. C) aggregate demand curve adjusts to the point where the long-run aggregate supply curve and the short-run aggregate supply curve intersect. D) None of the above answers is correct.
The Taylor rule links the Federal Reserve's target for the
A) federal funds rate to the money supply. B) money supply to changes in interest rates. C) federal funds rate to economic variables. D) money supply to shifts in money demand.
Mass marketing involves
A) using all types of media, such as television and radio, to reach as many consumers as possible. B) Internet ads only. C) using direct mailings only. D) lower-cost methods of advertising.
The first signs of major financial problems associated with the financial sector and real estate investment appeared in 2009
a. True b. False Indicate whether the statement is true or false