If inflation had long been 4% and was therefore expected to continue, then it unexpectedly increased to 7% inflation:
a. the real interest rate on loans issued just before the change occurred would decrease by three percentage points.
b. the real interest rate on loans issued just before the change occurred would increase by three percentage points.
c. the real interest rate on loans issued
just before the change occurred would not change.
d. none of the above.
a
You might also like to view...
The value (purchasing power) of each unit of money
a. is largely independent of the money supply. b. tends to increase as the money supply expands. c. increases as prices rise. d. tends to decline as the money supply expands in relation to the availability of goods and services.
If saving is greater than domestic investment, then
a. there is a trade deficit and Y > C + I + G. b. there is a trade deficit and Y < C + I + G. c. there is a trade surplus and Y > C + I + G. d. there is a trade surplus and Y < C + I + G.
Suppose the country of Maverick has specialized in the production of a good but has not yet entered into trade. At this point in time, Maverick has
A. Moved to a level of consumption outside its production possibilities curve. B. Moved along its existing production possibilities curve. C. Moved to a level of production outside its production possibilities curve. D. Shifted its production possibilities curve outward.
The recognition lag is generally of equal duration for both fiscal policy and monetary policy.
Answer the following statement true (T) or false (F)