According to the Taylor rule, if real GDP rises 1 percent above potential GDP, the Fed should raise the federal funds rate, relative to the current rate of inflation, by:
A. 0.5 percentage point.
B. 1 percentage point.
C. 1.5 percentage points.
D. 2 percentage points.
A. 0.5 percentage point.
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Answer the following statement(s) true (T) or false (F)
1. In the absence of transactions costs, changes in property rights have no effect on economic efficiency. 2. In the absence of transactions costs, changes in property rights have no effect on the distribution of income. 3. Changes in property rights will not affect the allocation of resources as long as transactions costs are zero and the subsequent effects on market demand are negligible. 4. The weak Coase theorem is true when reallocation of property rights have negligible income effects . 5. According to the Coase Theorem, in the absence of transactions costs, recipients of an external benefit can be expected to offer a bribe in exchange for greater production.
In January 2015, Tim's Gyms, Inc owned machines valued at $1 million. During the year, the market value of the equipment fell by 30 percent. During 2015, Tim spent $200,000 on new machines. During 2015, Tim's gross investment totaled
A) $1 million. B) $300,000. C) $200,000 D) $900,000.
The set of skills, knowledge, experience, and talent that determine people's productivity as workers is called:
A. physical capital. B. investment. C. human capital. D. educational training.
Suppose a country has a velocity of money equal to 12 and a nominal GDP of $30 billion. This means that each dollar in this economy is supporting approximately:
A. $10 in total income. B. $30 in total income. C. $12 in total income. D. $1.5 in total income.