If everyone knew in advance the exact rate of inflation:
A. the economy will have reached its long run equilibrium.
B. borrowers would be discouraged when inflation will be low and lenders when inflation will be high.
C. the risk of the breakdown of financial intermediation would increase.
D. the exact rate of inflation wouldn't matter so much because people could prepare.
Ans: D. the exact rate of inflation wouldn't matter so much because people could prepare.
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If the economy is producing a level of output $45 billion above full-employment real GDP, the most viable option to shift the output to full-employment GDP would be a
A. tax cut of $45 billion. B. tax increase of some amount less than $45 billion. C. tax increase of some amount greater than $45 billion. D. tax increase of $45 billion.
Refer to Figure 16-3. What prices are charged in the two markets?
A) price in market A = price in market B = $10 B) price in market A = price in market B = $5 C) price in market A = $10; price in market B = $15 D) price in market A = price in market B = $15
How much money would you have to put into a savings account today to be worth $500 three years from now at a market rate of interest equal to 8 percent?
A) $397 B) $351 C) $420 D) $459
What is the largest reason for people being unemployed?
a. New entrants b. Re-entrants c. Job losers d. Job leavers