Low expected inflation leads to ________ increases in wages and costs and to ________ actual inflation.
A. small; low
B. small; high
C. large; low
D. large; high
Answer: A
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In the money market, in the short run in order to decrease the nominal interest rate, the Fed must
A) increase the discount rate. B) increase the quantity of money. C) decrease the quantity of money. D) decrease the demand for money. E) directly lower the interest rate and not change either the demand for money or the supply of money.
According to the table above, would there be trade flows in both directions if the exchange rate were $1 = 1 peso?
What will be an ideal response?
Refer to the above figure. The rightward shift of the curve could have been caused by
A) a technological improvement. B) a technological setback. C) an increase in income. D) a decrease in income.
Real GDP in the country of Oz is growing at 5 percent and its population is growing at 2 percent. In the country of Lilliput, real GDP is growing at 4 percent and its population is growing at 0.5 percent. Thus,
A) real GDP per person in Oz is growing at a faster rate than in Lilliput. B) real GDP per person in Lilliput is growing at a faster rate than in Oz. C) real GDP per person in Lilliput is growing at the same rate as in Oz. D) real GDP per person in Lilliput is growing at a rate that is not comparable to that in Oz. E) We need more information to determine if real GDP per person in Lilliput is growing faster or slower than real GDP per person in Oz.