Refer to Figure 2-16. In the circular flow diagram, who are economic agents A and who are economic agents B?
A) A= firms; B = product markets B) A = firms; B = households
C) A = households; B = firms D) A = households; B = factor markets
C
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Suppose the inflation rate target is "0" and the long run federal funds target is also "0." If the inflation rate is 4% and the output gap is -2%, the federal funds rate set by the Taylor rule is ________
A) 8% B) 2% C) 5% D) 6%
As the dollar depreciates relative to the Russian ruble, U.S. goods become cheaper for Russians to purchase. Therefore, in the foreign exchange market, the
A) supply curve of dollars is downward sloping. B) demand curve for dollars is downward sloping. C) demand curve for euros is upward sloping. D) supply curve of euros is downward sloping.
Which of the following is an example of money functioning as a unit of account?
A) Bank of America charging 7 percent on an auto loan. B) Pepsi charging $1 for a can of soda. C) eBay using PayPal as a method of payment. D) Your writing a check at Target to pay for new clothes.
A bird flu epidemic causes many people to flee the country, but does not affect labor demand significantly because almost all the goods produced within the country are exported. What happens to current employment and the real wage rate?
A) Both employment and the real wage rate would increase. B) Both employment and the real wage rate would decrease. C) Employment would increase and the real wage would decrease. D) Employment would decrease and the real wage would increase.