Refer to Figure 17-9. A follower of the new classical macroeconomics would argue that a contractionary monetary policy to lower inflation after a supply shock, like that pursued by Volcker in 1979, would result in a movement from
A) C to D to A. B) A to C. C) A to D to C. D) A to B. E) C to A.
E
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If the real rate of interest is the same internationally, then the nominal interest rates differ solely by the expected inflation differential in two countries
Indicate whether the statement is true or false
In the 1960s, the Phillips curve was ________
A) consistent with a positive relationship between inflation and unemployment B) suggestive of a temporary trade off between inflation and unemployment C) a very popular explanation for inflation fluctuations D) all of the above E) none of the above
Economics is the study of how people cope with: a. fluctuations in stock prices. b. greed
c. limited human wants. d. limited resources.
A shift in the demand curve means
a. a change in demand at every price b. a rise in prices c. a decrease in both price and quantity demanded d. a change in consumer income