A reverse Phillips Curve would consist of a
A) positive relationship between deviations from trend in real and nominal interest rates.
B) negative relationship between deviations from trend in real and nominal interest rates.
C) positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity.
D) negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity.
D
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If consumption increases by $400 when income increases by $500, then the marginal propensity to consume is
A) 900. B) 100. C) 1.20. D) 0.80.
Consider a bond with a $100,000 face value that matures in 1 year. If the bond pays a nominal interest rate of 8%, what is the bond's discount?
a. $8,000. b. $7,407. c. $4,000. d. $1,250.
The persistence of budget deficits during the last several decades is not surprising because politicians will find
a. budget surpluses more attractive than budget deficits. b. tax increases more attractive than increases in government expenditures. c. budget deficits more attractive than budget surpluses. d. reductions in government expenditures more attractive than tax reductions.
The government of Blenova considers two policies. Policy A would shift AD right by 500 units while policy B would shift AD right by 300 units. According to the short-run Phillips curve, policy A will lead
a. to a lower unemployment rate and a lower inflation rate than policy B. b. to a lower unemployment rate and a higher inflation rate than policy B. c. to a higher unemployment rate and lower inflation rate than policy B. d. to a higher unemployment rate and higher inflation rate than policy B.