Over the past few decades, nominal interest rates have been higher than real rates of interest. This means that
a. lenders must have expected inflation.
b. borrowers must have expected deflation.
c. lenders must have expected prices to fall.
d. borrowers must have expected prices to fall.
a
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Gross domestic product can be thought of as a measure of
A) the national money supply. B) national income. C) national welfare. D) the national value of all legal exchanges. E) none of the above.
If the legal minimum wage rate were set at $15/hour,
A. employment would decline substantially. B. employment would decline slightly. C. employment would not be affected. D. employment would rise slightly.
Why didn't the huge increase in the money supply that resulted from quantitative easing lead to increases in inflation?
A. Because quantitative easing targets nominal GDP growth rates, not inflation rates. B. Because the federal government offset the inflationary pressure by drastically decreasing spending and raising taxes. C. Because quantitative easing increased the monetary base, but not broader definitions of money like M1 and M2. D. Because huge increases in the money supply generally lead to deflation, not inflation.
Economists call the physical cost of changing prices:
A. the cost of doing business. B. menu costs. C. inflationary suffrage. D. increasing profits.