During the 1990s, Japan experienced periods of deflation and very low nominal interest rates, approaching zero percent. Why would lenders of money agree to a nominal interest rate of almost zero?
What will be an ideal response?
With the deflation, the real interest rate exceeded the nominal interest rate. Lenders were making their decisions based on the higher real interest rate, not the very low nominal interest rate.
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During which Presidential administration did the United States both end its commitment to Bretton Woods and institute significant wage and price controls?
a. Dwight Eisenhower b. Richard Nixon c. Jimmy Carter d. William Clinton
Which of the following can a nation use to shift the supply or demand for its currency?
A. Fiscal, monetary, and trade policies. B. Fiscal policy but not monetary policy. C. Monetary policy but not trade policy. D. Trade policies such as tariffs but not fiscal policy.
According to Keynesian theory, which of the following is not true e of all short-term macro equilibria?
A. The aggregate demand curve intersects the aggregate supply curve. B. All macroeconomic goals are achieved. C. The economy may or may not be at full employment. D. Producers are selling everything they currently produce.
The fact that our wants are unlimited but our resources are limited implies that
A. we have to make choices. B. we should limit our wants. C. entrepreneurship has failed as an economic system. D. the only way to make someone better off is to make someone else worse off.