In a classic paper, Columbia University economist Phillip Cagan drew the line between inflation and hyperinflation at an inflation rate of
A) 50 percent per month.
B) 10 percent per month.
C) 20 percent per month.
D) 5 percent per month.
E) 25 percent per month.
A
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Foreign nations' demand for dollars increases as
a. Americans travel abroad b. foreigners purchase American goods c. Americans purchase foreign goods d. Americans buy foreign stocks or bonds e. Americans send cash gifts abroad
The Fed can close a recessionary gap by:
a. increasing fiscal expenditure b. increasing taxes. c. decreasing taxes. d. selling U.S. government bonds. e. lowering the discount rate.
Do policy makers know the exact value of the fiscal multiplier?
a. No, economists have almost no idea of the value of fiscal multipliers. b. No, they are not known with complete accuracy. c. Yes, economists know the precise value of the multiplier. d. Yes, although there is a very small range of uncertainty in the value.
Which of the following is a monetary policy tool that is meant to reduce interest rates and stimulate the economy?
a) Easy money b) Tight money c) Restrictive monetary policy d) Contractionary monetary policy