While the ________ is not important, the ________ can have a big effect on economic behavior.
A. unpredicted change in the price level; price level
B. predictable change in the price level; price level
C. price level; predictable change in the price level
D. price level; unpredicted change in the price level
Answer: D
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Which of the following is not an advantage of corrective taxes?
a. They raise revenues for the government. b. They enhance economic efficiency. c. They subsidize the production of goods with positive externalities. d. They move the allocation of resources closer to the social optimum.
__________________ capital specifies the amount of capital financial institutions should hold based on the riskiness of their assets
A) Regulatory B) Securitization-based C) Risk-based D) Leverage-based
A dollar-amount increase that has not been adjusted for inflation is called
A. a real increase. B. an inflationary increase. C. a net increase. D. a nominal increase.