If inflation had long been 7% and was therefore expected to continue, then it unexpectedly increased to 4% inflation:
a. the real interest rate on loans issued just before the change occurred would decrease by three percentage points.
b. the real interest rate on loans issued just before the change occurred would increase by three percentage points.
c. the real interest rate on loans issued
just before the change occurred would not change.
d. none of the above.
b
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An inferior good is a good for which the quantity demanded increases as the price decreases, holding everything else constant
Indicate whether the statement is true or false
A decrease in expected inflation shifts
a. the long-run Phillips curve left. b. the short-run Phillips curve left. c. neither the short-run nor long-run Phillips curve left. d. both the short-run and long-run Phillips curve left.
According to the Keynesian view, which of the following would most likely stimulate real output if an economy were in a recession?
What will be an ideal response?
An economic principle:
A. should be used to make every individual decision. B. can be combined with knowledge of economic institutions to make policy proposals. C. generally is stated as a normative statement. D. is an action taken to influence the course of economic events.