The DD schedule shows all combinations of which 2 variables so that the output market is in equilibrium?
A) imports and exports
B) exports and the exchange rate
C) foreign prices and the exchange rate
D) output and the exchange rate
E) output and exports
D
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Financial markets pay close attention to changes in the federal funds rate because these changes ________.
A. directly affect the interest payments on the national debt B. affect other interest rates in the economy C. directly affect a large volume of loans D. indicate commercial bank lending policies
Rent seeking refers to the asking prices for goods and services being sold on the black market
Indicate whether the statement is true or false
Post-World War II inflation rates, as measured by the CPI
a) are overestimated due to the inability to measure quality improvements b) are underestimated due to the exclusion of import prices c) are not comparable across decades due to decennial changes in the base year d) have tended to move in the opposite direction of inflation rates as measured by the GDP deflator e) have become increasingly accurate as technology has improved