The gold standard was the major system of exchange rate determination before 1914.
Answer the following statement true (T) or false (F)
True
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Assume that seigniorage and the government's primary deficit are both zero. A change in the debt-to-GDP ratio depends on just
A) the rate of inflation and total factor productivity. B) the growth rate of real GDP and the real interest rate. C) the growth rate of the money supply and the nominal interest rate. D) the growth rate of nominal GDP and the rate of inflation.
Though many assets can be used as a store of value, money is a particularly attractive method to store value because
a. it increases in value as prices rise. b. its purchasing power does not decline when prices rise. c. it is the most liquid of all assets. d. it is backed by gold.
If occupational safety laws were changed so that firms no longer had to take expensive steps to meet regulatory requirements, we would expect
a. the demand for the products of this industry to increase. b. the market price of the products of this industry to decrease in the short run but not in the long run. c. the firms in the industry to make long-run economic profit. d. competition to force producers to pass the lower production costs on to consumers in the long run.
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.