In the New Keynesian open economy model, if the exchange rate is fixed
A) fiscal policy and monetary policy are powerless.
B) fiscal policy is an effective stabilization tool.
C) a change in current total factor productivity increases output.
D) monetary policy is an effective stabilization tool.
B
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In general, the relationship between democracy and economic growth as demonstrated by the HPAEs is that
A) democratic nations grow faster than undemocratic nations. B) democratic nations grow slower than undemocratic nations. C) there does not seem to be a relationship between democracy and economic growth. D) democracies are much more variable in their rates of growth than undemocratic nations. E) democracies are much less variable in their rates of growth than undemocratic nations.
Suppose that nominal GDP were $1200 billion in 1990 and $2000 billion in 1995. The implicit GDP deflator was 1.00 in 1990 and 1.50 in 1995. From this we can infer that, between 1990 and 1995
A) nominal GDP rose by 33%. B) prices rose by 66%. C) real GDP remained constant. D) real GDP rose by about 11%.
If nominal interest rates increase:
A. the expected inflation rate must have gone up. B. either the expected inflation rate went down, the real interest rate went down, or both. C. either the expected inflation rate went up, the real interest rate went up, or both. D. the real interest rate must have gone up.
Refer to the information provided in Figure 24.5 below to answer the question(s) that follow.
Figure 24.5Refer to Figure 24.5. At aggregate output of $________ billion, unplanned inventories equal $200 billion.
A. 2,400 B. 3,000 C. 3,200 D. 3,600