Movements of ________ interest rates indicate that, contrary to the early Keynesians' beliefs, monetary policy was ________ during the Great Depression
A) nominal; tight
B) nominal; easy
C) real; tight
D) real; easy
C
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Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3, what changes in the market would result in an economically efficient output?
A) The price would decrease, the quantity supplied would increase, and the quantity demanded would decrease. B) The price would decrease, quantity demanded would increase, and quantity supplied would decrease. C) The price would decrease, the demand would increase, and the supply would decrease. D) The quantity supplied would decrease, the quantity demanded would increase, and the equilibrium price would decrease.
If a project involves risk, managers can account for the risk by ________ the discount rate, which ________ the present value of the future profits.
A) increasing; decreases B) decreasing; decreases C) increasing; increases D) decreasing; increases
If the consumer price index (CPI) in Year X was 300 and the CPI in Year Y was 325, the rate of inflation for Year Y was:
a. 325 percent. b. 25 percent. c. 5 percent. d. 8 percent.
How much is induced consumption when disposable income is $400 billion?
A. 0
B. $100 billion
C. $200 billion
D. $300 billion