The real interest rate ________ inflation ________
A) is unaffected in the long run by; because of the classical dichotomy
B) moves one for one with expected; in the long run
C) always increases with; but because of the Fisher effect lower expected inflation ensues
D) all of the above
E) none of the above
A
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When the total U.S. production of goods and services is divided into consumption goods and services, capital goods, government goods and services, and export goods and services, the largest component is
A) consumption goods and services. B) capital goods. C) government goods and services. D) export goods and services. E) capital goods and government goods and services tie for the largest component.
How have average wages of college graduates compared to average wages of high school graduates over the last 30 years?
A. Relative college wages have held steady over the last 30 years, with college graduates earning about 60% more than high school graduates during the entire period. B. Relative college wages have increased drastically over the last 30 years, from being 50% more than high school wages in 1980 to almost 100% more in 2005. C. Relative college wages have increased drastically over the last 30 years, from being 20% more than high school wages in 1980 to almost 60% more in 2005. D. Relative college wages have held steady over the last 30 years, with college graduates earning about 90% more than high school graduates during the entire period. E. Relative college wages have decreased slightly over the last 30 years, from being 40% more than high school wages in 1980 to just under 30% more in 2005.
The balance of payments constraint refers to the limits on:
A. exchange rate policy imposed by flexible exchange rates. B. currency convertibility observed in most developing countries. C. domestic macroeconomic policy, arising from a shortage of international reserves. D. macroeconomic policy resulting from IMF conditionality.
Which of the following is true about the Federal Reserve and its ability to prevent recessions? The Federal Reserve
A) can fine tune the economy and realistically hope to keep the economy from experiencing recessions. B) cannot realistically fine tune the economy and has little to no effect on the magnitude and length of recessions. C) cannot realistically fine tune the economy, but seeks to keep recessions shorter and milder than they would otherwise be. D) does not try to eliminate recessions, but instead focuses on preventing inflation.