According to the Taylor, if there is a recessionary gap of 3 percent of potential output and inflation is 4 percent, what real interest rate will the Fed set?
A. 0.02
B. 0.03
C. 0.015
D. 0.025
Answer: A
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Amy can produce either 5000 pounds of cheese or 20 cars per year. Mike can produce either 5000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Mike should specialize in producing
A. cars. B. neither cheese nor cars. C. both cheese and cars. D. cheese.
One World View article, "The Risks of China's Foreign-Exchange Stockpile," states that
A. The reserves of foreign exchange in China can cause inflation in China. B. China's reserves of currency can cause deflation in China. C. The dollar is undervalued. D. The trade imbalance is due to an overvalued yuan.
The market to buy and sell organs:
A. has been banned by public policy. B. is missing. C. would create surplus for those who would interact in it. D. All of these are true.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point F
A. is efficient and attainable. B. cannot be produced with the current state of technology. C. represents underallocation of resources. D. represents what the people want.