In an economy with persistent inflation,
a. real GDP will grow faster than nominal GDP.
b. nominal GDP will grow faster than real GDP.
c. nominal and real GDP will grow at the same rate.
d. nominal and real GDP will both fall.
b
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Why did observers at first believe that the damage from the impending subprime mortgage crisis would be too small to cause a recession?
An indirect cost of government debt is:
A. it can distort the credit market and slow economic growth. B. it can cause unemployment below the natural rate. C. it can cause hyperinflation. D. All of these are true.
The amount of borrowed reserves is ________ related to the discount rate, and is ________ related to the market interest rate
A) negatively; negatively B) negatively; positively C) positively; negatively D) positively; positively
A kinked demand curve is most likely to occur when other firms
a. follow any change in price by a rival firm. b. engage in collusive practices. c. follow a downward change in price but not an upward change by a rival firm. d. ignore any change in price by a rival firm.