Inflation that is ________ than what is expected benefits ________ and hurts ________.
A) greater; lenders; no one B) greater; lenders; borrowers
C) less; lenders; borrowers D) less; borrowers; lenders
Ques. 2If an increase in autonomous consumption spending of 10 million results in a 50 million increase in equilibrium real GDP, then
A) the MPC is 0.5. B) the MPC is 0.75. C) the MPC is 0.8. D) the MPC is 0.9.
Ques. 3In recent decades the United States has incurred overall balance of payments deficits.
Indicate whether the statement is true or false
Ques. 4Which of the following would be the source of a real business cycle?
A) changes in technology B) anticipated expansionary monetary policy
C) unanticipated contractionary monetary policy D) unanticipated expansionary monetary policy
Ques. 5Use the dynamic aggregate demand and aggregate supply model and start with Year 1 in long-run macroeconomic equilibrium.
For Year 2, graph aggregate demand, long-run aggregate supply, and short-run aggregate supply such that the condition of the economy will induce the Federal Reserve to conduct a contractionary monetary policy. Briefly explain the condition of the economy and what the Federal Reserve is attempting to do.