The data on U.S. nominal interest rates and inflation rates tends to:
A. serve as evidence against the Fisher Effect, since nominal interest rates and inflation rates seem to move in opposite directions.
B. serve as evidence against the Fisher Effect, since nominal interest rates and inflation rates seem to move in the same direction.
C. provide support for the Fisher Effect, since nominal interest rates and inflation rates seem to move in opposite directions.
D. provide support for the Fisher Effect, since nominal interest rates and inflation rates seem to move in the same direction.
Ans : D. provide support for the Fisher Effect, since nominal interest rates and inflation rates seem to move in the same direction.
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In the simple circular-flow diagram, who buys the factors of production?
a. households only b. firms only c. both households and firms d. neither households nor firms
If farm state legislators support the food-stamp program to aid the urban poor and urban state legislators in turn support farm subsidies, this is an example of:
A. the special-interest effect. B. political logrolling. C. the paradox of voting. D. cost-benefit analysis.
Explain why the tax multiplier is different from the government purchases multiplier, in both sign and relative magnitude
What will be an ideal response?
Under a system of floating exchange rates, an excess supply for a particular currency will lead to a(n)
A. long-term shortage of that currency. B. appreciation of that currency. C. long-term surplus of that currency. D. depreciation of that currency.