For a person to keep his real income steady at a certain level from one year to the next, his nominal income must:
A. Rise if the price index falls
B. Stay the same as the price index rises
C. Fall if the price index rises
D. Rise as fast as the price index
D. Rise as fast as the price index
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Federal government purchases, as a percentage of GDP
A) have fallen since the early 1950s. B) have remained roughly the same since the early 1950s. C) rose from the early 1950s until the mid 1980s, and then fell. D) have risen since the early 1950s.
Federal Reserve district banks perform all of the following roles EXCEPT
A) managing checking clearing in the payments system. B) performing regulatory functions. C) setting the federal funds rate. D) managing currency in circulation by issuing new Federal Reserve Notes.
Scope of Services An apartment owner has contracted for lawn mowing services for a number of apartment complexes he owns. He negotiated a price per month but the scope of services to be performed remained a bit vague. Why is he disappointed that the winning contractor provides less than the desired level of services?
A basic purpose of macroeconomic theory is to:
a) Stop economic contractions from occurring. b) Control the business cycle. c) Cause GDP to grow. d) Explain the business cycle.