If actual inflation is less than expected inflation, what is the relationship between the actual real wage and the expected real wage?
A) The actual real wage is higher than the expected real wage.
B) The actual real wage is lower than the expected real wage.
C) The actual real wage is equal to the expected real wage.
D) The relationship between the actual real wage and the expected real wage cannot be predicted.
A
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If the quantity of money demanded is greater than the quantity supplied, then in the short run the
A) demand for financial assets increases. B) price of financial assets rises. C) nominal interest rate rises. D) nominal interest rate falls. E) price level rises.
The Federal Reserve cut the federal funds rate seven times between September 2007 and March 2008. What event led the Fed to make these reductions in the federal funds rate?
A) The chairman of the Federal Reserve System persuaded members of the Federal Open Market Committee to lower interest rates in order to reduce the price of oil in international markets. B) During this period there was a substantial reduction in the demand for housing. C) It was in response to reductions in the discount rate, which was also lowered seven times over the same time period. D) Several large investment banks failed during this time period.
Which of the following are NOT included among Gordon's criticisms of Friedman's fooling model?
A) Workers buy many goods on a weekly basis and thus could discover quite quickly that prices had risen. B) Workers could discover movements in the aggregate price level fairly easily. C) The model relied on a non-market-clearing explanation of the labor market. D) Workers would predict higher prices if policies that led to higher prices in the past were used again.
Sandee Hollub, an elementary school teacher, believed that she was being treated unfairly by her principal, so she stormed off the job and two days later found another teaching job in another school. For two days, Sandee experienced
a. cyclical unemployment b. structural unemployment c. involuntary unemployment d. frictional unemployment e. being out of the labor force