A good is normal for a consumer if
A) it is always consumed in a consistent quantity.
B) its consumption rises when income rises.
C) its consumption falls when income rises.
D) some minimal level of the good must be consumed to assure the consumer's survival.
B
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A good measure of the standard of living is
A) total real GDP. B) real GDP per capita. C) total nominal GDP. D) nominal GDP per capita.
In the Keynesian model, suppose the Fed sets a target for the real interest rate. If the IS curve shifts up and to the right, and the Fed wants to keep output unchanged in the short run and the price level unchanged in the long run, it will
A) shift the LR curve up. B) not shift the LR curve. C) shift the LR curve down. D) shift the IS curve up and to the right.
Which of the following has never been a monetary policy tool of the Fed?
A) open market operations B) the required reserve ratio C) the discount rate D) the term auction facility (TAF) program E) income tax rates
When people expect inflation, they assume that prices are going to increase at a certain rate and factor this into their decision making.
Answer the following statement true (T) or false (F)