The short-run aggregate supply curve is vertical when inflation is predicted accurately.
Answer the following statement true (T) or false (F)
True
You might also like to view...
Money is best defined as
A) anything that can be sold to pay for something. B) currency. C) anything that is backed by gold. D) anything accepted as a means of payment. E) anything that has value.
If the Fed has the discretion to choose its policy and announces a low inflation policy, then
a. the public is likely to discount this claim because the Fed has an incentive to change their policy in the future. b. the public is likely to believe this claim because the Fed has no incentive to change their policy in the future. c. the Fed will always cheat and increase inflation in the future. d. the Fed will have to keep inflation lower in the future or they will be voted out of office. e. none of the above.
If the quantity of loanable funds supplied is less than the quantity demanded, then there is a
a. shortage of loanable funds and the interest rate will fall. b. shortage of loanable funds and the interest rate will rise. c. surplus of loanable funds and the interest rate will fall. d. surplus of loanable funds and the interest rate will rise.
The ceteris paribus assumption is a behavioral assumption.
a. True b. False