Answer the following statement(s) true (T) or false (F)
1.The natural rate hypothesis states that the economy will self-correct to the natural rate of unemployment.
2.An unanticipated rise in the inflation rate makes real wages rise.
3.Over time, an increase in aggregate demand will shift the short-run Phillips curve to the right.
4.Adaptive expectations are an individual’s belief that the recent information on inflation and unemployment are poor indicators of the future.
5.A decrease in energy prices would be considered a positive supply shock.
1.true
2.false
3.true
4.false
5.true
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Income inequality is greater within nations than among nations
a. True b. False Indicate whether the statement is true or false
Why might the Fed decide to monetize the deficit?
a. to keep inflation low b. to reduce the structural deficit c. to reduce the budget deficit d. to keep interest rates low
The value of the marginal product of new capital increases when the:
A. productivity of new capital increases. B. the price of the good the firm produces decreases. C. real interest rate increases. D. price of new capital goods increases.
It is costly to purchase a new car every two or three years because
A) the financing cost is significantly higher for a new car than for a used one. B) the gasoline tax for the fuel of a new car is generally higher than for a used one. C) the maintenance cost of a new car is generally higher than for a used one. D) a new car will depreciate rapidly in value during the first few years of use.