The level of income is unchanged in response to unanticipated anti-inflation policy in ________
A) real business cycle theory
B) traditional Keynesian theory
C) new Keynesian theory
D) post classical theory
A
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Explain why the simple deposit multiplier overstates the true deposit multiplier
What will be an ideal response?
A competitive firm would benefit from charging a price below the market price because the firm would achieve (i) higher average revenue. (ii) higher profits. (iii) lower total costs
a. (i) only b. (ii) and (iii) only c. (i), (ii), and (iii) d. None of the above is correct.
Samantha is lending Jack $1,000 for one year. The CPI is 1.60 at the time the loan is made, and they both expect it to be 1.68 in one year. If Samantha and Jack agree that Samantha should earn a 3 percent real return for the year, the nominal interest rate on this loan should be ________ percent.
A. 8 B. 11 C. 3 D. 5
At equilibrium expenditure...
a) consumers' expenditures on goods and services equal firms' purchases of investment goods b) firms hold no inventories of raw materials or final goods c) aggregate planned expenditure equals real GDP d) aggregate planned expenditure equals real GDP minus net exports