The real interest rate tells you how fast the purchasing power of your bank account rises over time
a. True
b. False
Indicate whether the statement is true or false
True
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The direct effect of an increase in the money supply is to
A) raise interest rates as people increase their saving. B) decrease aggregate demand as people anticipate future economic problems. C) increase interest rates as people anticipate higher inflation in the future. D) increase aggregate demand as people try to spend their excess money balances.
In Figure 1.9, the slope of the line between points L and M is
A. 0.67. B. 0.75. C. 1.20. D. 0.80.
An increase in the marginal tax rate, with the average tax rate held constant, will
A. increase the amount of labor supplied at any real wage. B. not affect the amount of labor supplied at any real wage. C. decrease the amount of labor supplied at any real wage. D. increase the amount of labor supplied at any real wage if the average tax rate is above the marginal tax rate, but decrease the amount of labor supplied at any real wage if the average tax rate is below the marginal tax rate.
Members of the Federal Reserve Board of Governors are appointed for one fourteen-year term so that they:
A. Have time to learn how the Fed operates. B. Are more likely to make politically acceptable decisions. C. Make their decisions based on economic, rather than political, considerations. D. Have enough time to travel to all 12 regional banks.