The real interest rate is given by:
A) the nominal interest rate adjusted for inflation.
B) the nominal interest rate adjusted for changes in exchange rate.
C) the nominal interest rate adjusted for income changes.
D) the nominal interest rate adjusted for tax rates.
A
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According to Keynes, the primary determinant of a person's saving is
A) the nominal interest rate. B) the real interest rate. C) the level of the person's consumption spending. D) the level of the person's real current income.
Suppose the Fed increases the money supply. As a result of this, people deposit excess funds into their bank accounts, causing banks to have excess reserves. As a result, the banks lower the interest rates that they charge on loans, and investment rises, causing an increase in aggregate spending. This is known as a(n)
A. indirect effect of monetary policy. B. direct effect of monetary policy. C. indirect effect of fiscal policy. D. direct effect of fiscal policy.
In Year 1, the actual budget deficit was $150 billion and the cyclically-adjusted deficit was $125 billion. In Year 2, the actual budget deficit was $130 billion and the cyclically-adjusted deficit was $125 billion. It can be concluded that from Year 1 to Year 2:
A. Real GDP decreased B. Real GDP increased C. Full employment was attained D. Fiscal policy became less expansionary
Suppose the population is 220 million people, the labor force is 150 million people, the number of people employed is 130 million and the working-age population is 175 million people. What is the unemployment rate?
What will be an ideal response?