When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline
B. increase; raise; decline
C. decline; lower; expand
D. decline; raise; decline
Answer: C
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List the various categories in which a bank's assets are divided?
What will be an ideal response?
Based on the table "Real and Nominal GDP," if year one is the base year, then the nominal GDP in year two, is ________
A) 8250 B) 5000 C) 7200 D) 7500 E) none of the above
Which of the following is an explanation for why some poor countries suffer from lower productivity growth?
A. Too much saving has led to the accumulation of capital in poor countries. B. The adoption of technology too quickly hurts the labor force in poor countries. C. Primary education is universal in poor countries. D. Poor countries have lower capital stocks.
The interest parity condition indicates that the domestic interest rate must be equal to
A) the foreign interest rate. B) the expected rate of depreciation of the domestic currency. C) the expected rate of appreciation of the domestic currency. D) the foreign interest rate minus the expected rate of appreciation of the foreign currency. E) none of the above