An increase in the money supply in the short run changes ___ , whereas in the long run, ___ change.
a. exchange rates; nominal interest rates
b. price levels; interest rates
c. interest rates; interest rates
d. interest rates; inflation rates
Ans: d. interest rates; inflation rates
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A "market" is an arrangement that allows people to exchange things
Indicate whether the statement is true or false
To cut costs in the face of declining demand and increased competition, many fast food restaurants have focused on reducing:
A) labor costs. B) utility costs. C) paper napkin costs. D) none of the above.
If the expected inflation rate was 2.5%, the expected real interest rate was 4.0%, and the actual inflation rate turned out to be 3.2%, then the real interest rate equals
A) 1.7%. B) 3.2%. C) 3.3%. D) 4.7%.
If chain-weighted increases in real GDP for 2002-03, 2003-04, 2004-05, 2005-06, and 2006-07 are 5%, 4%, 2%, 1%, and 3% respectively, and nominal GDP in the 2002 base year is $6244.4 billion, then chain-weighted real GDP for 2007 is
A) $6987.02 billion. B) $7,181.06 billion. C) $7235.6 billion. D) $7239.0 billion.