If the private sector wishes to hold a constant quantity of real government bonds, inflation requires that the private sector continuously ________ those bonds, so that the government ends up having to pay out interest on net equal to the ________
interest rate times the bonds outstanding. A) sell, nominal
B) sell, real
C) buy, nominal
D) buy, real
D
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Command-and-control legislation, as compared to incentive-based regulation:
a. encourages the use of comparative advantage in the short run, and the development of new technology in the long run. b. encourages the use of comparative advantage in the short run, but discourages the development of new technology in the long run. c. discourages the use of comparative advantage in the short run, but encourages the development of new technology in the long run. d. discourages the use of comparative advantage in the short run, and discourages the development of new technology in the long run.
If the interest rate rises and government spending falls, what will happen to output, ceteris paribus?
a. It will rise. b. It will stay the same. c. It will fall. d. It is uncertain what will happen.
The monopolistically competitive firm earns zero economic profit in the long run.
Answer the following statement true (T) or false (F)
Answer the following statements true (T) or false (F)
1. Specialization based on comparative advantage will shift a nation's production possibilities curve outwards. 2. Through international trade an economy can consume a combination beyond its domestic production possibilities curve. 3. If the U.S. dollar depreciates against the euro, then it will be easier for U.S. exporters to sell their products in Europe. 4. In the dollar/yen market, if the supply of yen increases other things being equal, the dollar will appreciate. 5. Relatively high rates of U.S. inflation compared to other countries will increase the supply of, and decrease the demand for, dollars in foreign exchange markets.