When deflation occurs
A) the nominal interest rate is greater than the real interest rate.
B) the nominal interest rate is equal to the real interest rate and inflation is negative.
C) the real interest rate is greater than the nominal interest rate.
D) the nominal interest rate is equal to the real interest rate and inflation is positive.
C
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In the long run, a decrease in the money supply growth rate
a. reduces expected inflation so the long-run Phillips curve shifts left. b. reduces expected inflation so the short-run Phillips curve shifts left. c. Both A and B are correct. d. None of the above is correct.
Focal point equilibria definitely violate the principle of rational choice.
Answer the following statement true (T) or false (F)
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point A to Point E, the opportunity cost of motorcycles, measured in terms of hybrid cars
A. remains constant. B. decreases. C. initially increases, then decreases. D. increases.
Suppose you are a famous international economic advisor. You have been asked to asses the possibilities for growth in an African country. It is a country abundant in labor and some natural resources. The capital-to-labor ratio is low
It has a free market economy. You have found that this country does not have a very strong and healthy banking system, however the political system is stable and the government does a good job protecting property rights. Assess this country's prospects for growth. Recommend two things that would enhance the country's growth.