The IS curve will shift to the left when which of the following occurs?
A) a reduction in the money supply
B) a reduction in government spending
C) an increase in the interest rate
D) all of the above
E) none of the above
B
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(Requires Internet Access for the test question) The following question requires you to download data from the internet and to load it into a statistical package such as STATA or EViews
a. Your textbook estimates an AR(1) model (equation 14.7) for the change in the inflation rate using a sample period 1962:I — 2004:IV. Go to the Stock and Watson companion website for the textbook and download the data "Macroeconomic Data Used in Chapters 14 and 16." Enter the data for consumer price index, calculate the inflation rate, the acceleration of the inflation rate, and replicate the result on page 526 of your textbook. Make sure to use heteroskedasticity-robust standard error option for the estimation. b. Next find a website with more recent data, such as the Federal Reserve Economic Data (FRED) site at the Federal Reserve Bank of St. Louis. Locate the data for the CPI, which will be monthly, and convert the data in quarterly averages. Then, using a sample from 1962:I — 2009:IV, re-estimate the above specification and comment on the changes that have occurred. c. Based on the BIC, how many lags should be included in the forecasting equation for the change in the inflation rate? Use the new data set and sample period to answer the question. What will be an ideal response?
Which of the following is an example of an open-access resource?
a. a city subway system b. a college education c. an elementary school education d. whales in the ocean e. pandas in the zoo
The natural rate of unemployment is that rate at which the economy achieves its potential real GDP
a. True b. False Indicate whether the statement is true or false
If a bank does not have enough reserves, it can:
A. Buy bonds on the open market. B. Raise the interest rate it charges borrowers. C. Borrow reserves from the discount window. D. Make more loans.