If the Federal Reserve surprises investors by announcing an easing of monetary policy:
A. it should have no impact on the slope of the yield curve.
B. we should expect the yield curve to steepen.
C. we should expect the yield curve to possibly become inverted.
D. the yield curve would flatten.
Answer: B
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The IS curve ________
A) shows the relationship between aggregate output and the real interest rate when the goods market is in equilibrium B) tells us that increases in autonomous consumption, investment, government purchases, or net exports raise output for any real interest rate C) tells us that a decrease in taxes or in financial frictions leads to an increase in output for any given real interest rate D) all of the above E) none of the above
Which of the following is true in the short run but not in the long run? a. Actual output is equal to potential output. b. Actual output can exceed potential output. c. Structural unemployment can exist
d. Frictional unemployment can exist. e. Real and nominal GDP can differ.
Why are rules of thumb beneficial to consumers?
a. They provide consumers with the most optimal solution. b. They prevent consumers from falling prey to logical fallacies. c. They save consumers time and mental processing power. d. They eliminate the need to maximize marginal utility.
Unemployment rates for skilled workers compared to unemployment rates for unskilled workers are:
a. Lower, because skilled workers tend to be primarily employed by government at the local, state, and Federal levels b. Lower, because skilled workers tend to be employed in less cyclically vulnerable industries, such as the services and nondurable goods industries c. Higher, because businesses are less likely to retain the more costly skilled workers no matter what type of industry d. Higher, because skilled workers tend to be employed in more cyclically vulnerable industries, such as the durable goods industry