In the basic aggregate demand - aggregate supply model, an decrease in oil prices will in the run lead to a ______ in real GDP, and ____ in the price level.
Fill in the blank(s) with the appropriate word(s).
Answer: increase, decrease
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According to the Taylor rule, the Federal Reserve sets interest rates in response to:
A. the inflation rate and the current output gap. B. the inflation rate and the unemployment rate. C. the current output gap and the target money supply growth. D. the S&P 500 index and the inflation rate.
Use the above figure. This graph is known as
A) the Laffer curve. B) the short-run Phillips curve. C) the NAIRU relationship. D) the Keynesian curve.
If the real interest rate is 5% and the inflation rate is 3%, then the nominal interest rate is 8%
a. True b. False Indicate whether the statement is true or false
The state of Massachusetts requires all citizens to purchase medical insurance or face a monetary penalty when filing their taxes. The penalty is significantly less than the average annual insurance premium. Moreover, the state requires insurance companies to issue policies to anyone who applies, regardless of their health at the time of application. Which of the following examples describes the
inherent adverse selection problem? a. Tricia purchases an insurance policy through her employer and visits her doctor for annual check-ups. b. Sue purchases insurance only after learning that she has cancer. c. Mike pays the penalty rather than purchasing insurance because it is cheaper for him than paying insurance premiums and he is generally in good health. d. Both b and c are correct.