The early Phillips curve showed a trade-off between unemployment and inflation because it was drawn for a period in which the main source of instability was aggregate demand
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose on any given day the prevailing equilibrium federal funds rate is below the Federal Reserve's federal funds target rate
If the Federal Reserve wishes for the federal funds rate to be at their target level, then the appropriate action for the Federal Reserve to take is a ________ open market ________, everything else held constant. A) defensive; sale B) defensive; purchase C) dynamic; sale D) dynamic; purchase
The vicious circle of poverty makes it difficult for an LDC to:
a. establish political institutions. b. control inflation. c. save and invest. d. fix its exchange rate.
The one thing that all economic models have in common is the
a. emphasis on macroeconomics b. attempt to explain market prices c. analysis of what ought to be d. use of abstraction e. ability to describe economic realities exactly
It is difficult to know whether an economy is in or moving toward equilibrium because
a. an economy is always at rest, which is equilibrium b. the economy only changes when it moves from one equilibrium level to another c. our economy is always at full employment, which is regarded as an equilibrium position but changes in the rate of inflation at full employment suggest that it can surpass equilibrium d. there is always increasing inflation coupled with low productivity growth e. economic changes are continuous so that an equilibrium level is difficult, if not impossible, to identify