Which combination of fiscal policy actions would be most contractionary for an economy experiencing severe demand-pull inflation?
a. Increase taxes and government spending
b. Increase taxes and decrease government spending
c. Decrease taxes and government spending
d. Decrease taxes and increase government spending
b. Increase taxes and decrease government spending
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In the absence of borrowing constraints, then beginning at age 18, the individual should consume
Consider an individual who enters adulthood and the labor force at age 18, expects to work 5 years at a real income of $10,000 per year, anticipates earning a real income of $40,000 per year from age 23 to 63, expects to retire with a $10,000 annual pension, and live until age 78. Suppose the interest rate is zero, and the individual seeks perfectly smooth consumption across his adult lifetime. a) all of his income as he receives it each year b) $10,000 every year c) $20,000 every year d) $30,000 every year e) $25,000 every year
When the nominal interest rate increases, the
A) demand for money increases and the demand for money curve shifts rightward. B) demand for money decreases and the demand for money curve shifts leftward. C) quantity of money demanded increases and there is a movement upward along the demand for money curve. D) supply of money curve shifts rightward. E) quantity of money demanded decreases and there is a movement upward along the demand for money curve.
The "Fisher Effect" occurs when a one-percentage-point rise in expected inflation ________ interest rate by one percentage point
A) raises the expected real B) lowers the expected real C) raises the nominal D) lowers the nominal
China's economy was much more agricultural than Russia's, and observers believe this aided its economic transition
Indicate whether the statement is true or false