If increases in government spending lead to inflation, the value of the multiplier is reduced
a. True
b. False
Indicate whether the statement is true or false
True
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The Bretton Woods system:
A. committed the participating countries to a system of floating exchange rates. B. was set up as a result of the U.S. balance of payments crisis in the early 1970s. C. committed the participating countries to a system of fixed exchange rates. D. established the rules of the game of the gold standard.
Keynes believed that the precautionary demand for money varied
a. negatively with income. b. positively with income. c. negatively with the interest rate. d. positively with the interest rate. e. Both b and c
The observed unemployment rate is less than the natural rate of unemployment if:
a. the inflation rate is lower than expected. b. the reservation wage is adjusted to account for higher inflation. c. real wage increases with increase in prices. d. reservation wages go up with the rate of inflation. e. the inflation rate is higher than expected.
What point on the graph represents maximum consumer confidence?
a. A
b. B
c. C0
d. D