During periods of inflation, the real value of a given amount of nominal dollars decreases
a. True
b. False
Indicate whether the statement is true or false
True
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To construct a graph that would enable us to find equilibrium GDP, we would need to plot
a. the consumption-income line b. a line showing the sum of consumption and investment at each income level c. the investment spending line d. the consumption-income line and the government expenditures line e. an aggregate expenditure line and the 45-degree line from the origin
Other things the same, a country could move from having a trade deficit to having a trade surplus if either
a. saving rose or domestic investment rose. b. saving rose or domestic investment fell. c. saving fell or domestic investment rose. d. saving fell or domestic investment fell.
Other things the same, an increase in the amount of capital firms wish to purchase would initially shift
a. aggregate demand right. b. aggregate demand left. c. aggregate supply right. d. aggregate supply left.
Which one of the following is TRUE?
A. The real rate of interest is the nominal rate plus the anticipated rate of inflation. B. Increases in anticipated inflation increase the real interest rate. C. The nominal rate of interest is the real rate plus the anticipated rate of inflation. D. Increases in the CPI increase the real interest rate.