According to the Fisher effect, if the central bank raises the rate of money supply growth, what happens to the nominal and the real interest rate?
The nominal interest rate rises by as much as inflation rises, the real interest rate is unchanged.
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Suppose that a binding rent control law is repealed in San Francisco. As a result, we would expect the total number of units rented in the city to a. increase
b. decrease. c. remain unchanged. d. decrease, then increase.
Events of the 1970s and early 1980s showed that
A) the Phillips curve presents policymakers with a stable menu of choices. B) cycles of unemployment and inflation rates appear to have gravitated around a 6 percent unemployment rate. C) lower inflation rates are consistently accompanied by higher unemployment rates. D) a tradeoff between inflation and unemployment may not always exist. E) a and c
Which of the following will discourage investment?
What will be an ideal response?
Which of the following is a short-run adjustment?
A. BMW constructs a new assembly plant in South Carolina. B. A local bakery hires two additional bakers. C. Six new firms enter the plastics industry. D. The number of farms in the United States declines by 5 percent.