The aggregate price level is likely to rise if ________
A) the long-run real interest rate rises B) the long-run nominal interest rate rises
C) the stock of money grows faster than real GDP D) real GDP grows faster than the stock of money
C
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The situation in which short-term interest rates are pushed to zero, leaving the central bank unable to lower them further is known as
A) an interest rate panic. B) the Taylor rule. C) a zero-sum game. D) a liquidity trap.
According to the book, the most important strategy to a firm is its
A) pricing strategy. B) new product strategy. C) cost control procedures. D) all of these choices were reported to be equally important.
If the MPC is 0.75, what is the value of the government purchases multiplier?
a. -1.33 b. 3.0 c. -3.0 d. 4.0 e. -4.0
A perfectly inelastic demand curve is
A) a horizontal straight line. B) a vertical straight line. C) a downward sloping straight line that intersects the horizontal axis at the origin. D) an upward sloping straight line that crosses the vertical axis.