One dollar could be exchanged for 55 rupees in 2013 and for 60 rupees in 2014. This implies that the:
A) real exchange rate did not change in 2014. B) dollar appreciated in 2014.
C) nominal exchange rate did not change in 2014. D) rupee appreciated in 2014.
B
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The expectations-augmented Phillips curve is
? = ?e - 3(u - 0.05). (a) Graph the long-run Phillips curve and the short-run Phillips curve for an expected inflation rate of 0.03. If the Fed chooses to keep the actual inflation rate at 0.03, what will be the unemployment rate? Label the equilibrium point "A". What is the numerical value of the natural rate of unemployment? (b) An aggregate demand shock (resulting from increased exports of goods) raises the inflation rate to 0.06 (the natural rate of unemployment and the expected inflation rate are not affected). Show what happens on your graph. Label the equilibrium point "B". What is the numerical value of the unemployment rate? (c) In response to the aggregate demand shock, suppose the Fed allows the inflation rate of 0.06 to persist. Show what happens on your graph, labeling the equilibrium point "C". In the long run, what is the numerical value of the unemployment rate? (d) From the situation in part (c), suppose a supply shock (an oil price increase) raises the natural rate of unemployment by .01 from its original value. If the expected inflation rate does not change, show what happens in your graph, labeling the equilibrium point "D".
Which of the following would not appear on the asset side of a commercial bank balance sheet?
a. Reserves. b. Checkable deposits. c. Loans. d. Securities.
In the short run, which of the following will reduce the gains from labor migration to the recipient nation?
a. Workers remit less than the value of their marginal products. b. Migrant workers have a declining marginal product so that the equilibrium wage is lower than MPs of earlier immigrants. c. Immigrants are low cost in terms of adjustment costs such as crime prevention, language assimilation, and few children enrolled in school. d. Workers remit more than the value of their marginal products.
Gross domestic product (GDP) includes:
A. intermediate as well as final goods. B. foreign goods as well as domestically produced goods. C. used goods sold in the current time period. D. only final goods and services.