The price of a gallon of gasoline at the pump increased by 10 percent at the same time that the inflation rate was 15 percent. The nominal price of gasoline ________, and the real price of gasoline ________.
A. increased; also increased
B. increased; decreased
C. decreased; increased
D. increased; did not change
Answer: B
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Typically, the unemployment rate ________ during a recession and ________ during an expansion.
A. rises; does not change B. rises; falls C. rises; rises even more D. falls; rises
Subject to the approval of the Board of Governors, the decision of choosing the president of a district Federal Reserve Bank is made by
A) all nine district bank directors. B) the six district bank directors elected by the member banks. C) three district bank directors who are professional bankers. D) district bank directors who are not professional bankers. E) class A and class B directors.
To help reduce the price level, the government could:
A. run budget deficits. B. decrease taxes. C. increase government spending. D. run budget surpluses.
Will increases in federal spending always increase real GDP and employment in the short run? Are there any circumstances in which the federal government would not want to increase its spending even if it results in higher uotput and lower unemployment in the short
What will be an ideal response?