When people expect higher inflation, usually nominal interest rates will:
A. rise.
B. fall.
C. remain unchanged.
D. move erratically.
Answer: A
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The best way to describe the international position of the U.S. dollar during the 1980's is
a. floating downward most of the time. b. floating downward at first, and then rising sharply. c. stable throughout the decade. d. rising sharply during the first half of the decade, and then falling.
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
The rule of 70 estimates how long it will take a country to double its real GDP per capita by:
A. multiplying the average growth rate by 70 percent. B. dividing the current real GDP per capita by 70. C. dividing the average growth rate by 70. D. dividing 70 by the average growth rate.
The total utility from consuming 8 units of a good is 155. The marginal utility of the 8th unit is 7 and the marginal utility of the 7th unit is 11. The total utility from consuming 6 units of the good is
A. 173. B. 137. C. 130. D. 144.