The money, time, and opportunity used to change prices to keep pace with inflation are called:
A. menu costs.
B. shoe-leather costs.
C. tax distortions.
D. the velocity of inflation.
A. menu costs.
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The American Recovery and Reinvestment Act of 2009 called for:
A. a return to the gold standard. B. reductions in government spending and tax increases. C. the purchase of assets and equity from troubled financial institutions. D. increases in government spending and tax cuts.
$1 received n years from now has a value today of
A) ($1 + i)/i. B) $1/(1 + i). C) ($1 + i /i. D) $1/(1 + i .
Do policy makers know the level of unemployment that is associated with "full employment"?
a. Yes, economists have the precise level of unemployment that is full employment. b. Yes, although there is a small range of uncertainty in this measure. c. No, economists have no idea what this level of unemployment is. d. No, this number is not known with complete accuracy.
Explain how the exchange rate gets determined in a flexible exchange rate system.
What will be an ideal response?