Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. higher; potential
D. lower; higher
Answer: A
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Luigi is willing to lend Klaus $5,000 for one year at a nominal rate of interest of 7%. Both Luigi and Klaus expect the rate of inflation to be 2% in the next year. What is the real return that Klaus is offering to Luigi?
A. 9% B. 5% C. 7% D. 2%
"As the price of gasoline increases, fewer people buy cars that are gas guzzlers." A graph showing this relationship would
A) have a positive relationshi
The table above gives the CPI market basket for 2010 and 2011. Suppose that 2010 is the reference base period
a. What is the cost of the CPI market basket in 2010? b. What is the cost of the CPI market basket in 2011? c. What is the CPI for 2010? d. What is the CPI for 2011?
The Taylor rule (where a and b are positive parameters) is represented by
A) i = i + a(? - ?) - b(un - u). B) i = i + a(? - ? ) + b(u - un). C) i = i + a(? - ?) - b(u - un). D) none of the above