Suppose a central bank announced that it was going to make a serious effort to fight inflation. A few years later the inflation rate is lower, but there had been a serious recession. We could conclude with certainty that
a. the rational expectations hypothesis is false.
b. the rational expectations hypothesis is true.
c. the policymakers lacked credibility.
d. None of the above is certain.
d
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For a renter, the income effect of an increase in apartment rents will
a. have a greater effect than the income effect of an increase in the price of chewing gum b. have no impact on the demand curve for apartments, because everything except price is assumed constant c. have less of an effect than the income effect of an increase in the price of chewing gum d. be almost negligible, because housing is a necessity e. occur only when income increases
The Fed increases the money supply by selling bonds
a. true b. false
Using the fiscal year 2020 estimates, the largest component of state and local revenue is the
A. revenue from the federal government. B. corporate income tax. C. individual income tax. D. sales, excise, and gross receipts taxes.
The open economy multiplier will decrease if
A. the MPM decreases. B. the MPM increases. C. either the MPM or the MPC decreases. D. the MPC decreases.