Which of the following is NOT a basis for the Taylor-rule guideline for how the Federal Reserve should set its target value for the federal funds rate?
A) the current deviation of the actual inflation rate from the Fed's inflation objective
B) the gap between actual real GDP and a measure of potential real GDP
C) an estimated long-run real interest rate
D) the present deviation of the actual unemployment rate from the Fed's unemployment objective
D
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A firm will find it profitable to hire workers up to the point at which their
A. marginal resource cost is equal to their MRP. B. MP is equal to their MRP. C. marginal resource cost equals their wage rate. D. wage rate equals product price.
An excess demand for money will result in all the following, except:
a. an excess supply of bonds. b. a rise in investment spending. c. a fall in bond prices. d. a fall in consumption spending. e. a fall in equilibrium real GDP.
Small-denomination time deposits are part of M2, but not part of M1
Indicate whether the statement is true or false
Data from a study of retail drug prices by the OECD and Eurostat (2008) showed that:
a. there is some evidence that pharmaceutical prices are highly correlated with a country's per capita GDP. b. high-income countries can keep their drug prices below the OECD average by relying on strict price controls. c. the U.S. had the highest retail drug prices among the 30 countries studied. d. U.S. drug prices are double the OECD average.