Assume the long-term nominal interest rate is 7% and the expected inflation rate is 3%
If the Fed increases the money supply and as a result, the expected inflation rate increases to 5%, then based on the Fisher effect, the long-term real interest rate will A) remain at 4%.
B) increase to 6%.
C) fall to 3%.
D) increase to 9%.
A
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Explain why the budget deficit and the trade deficit are sometimes referred to as the "twin deficits."
What will be an ideal response?
Briefly explain the case for a negative income tax.
What will be an ideal response?
The best number of workers for any employer to hire is that quantity in which:
A. the marginal revenue product equals the marginal factor cost. B. the marginal revenue product exceeds the marginal factor cost. C. total costs are minimized. D. total revenue is maximized.
Which statement is the most accurate?
A. When we talk about big business in the U.S., we're talking about oligopoly. B. All oligopolists are very large firms. C. Oligopolists produce at the minimum points of their average total cost curves. D. It is impossible to lose money under oligopoly.