Country A has a higher money supply growth rate and a long-run Phillips curve that is farther to the left than country B's. In the long run as compared to country B, country A will have
a. lower unemployment and higher inflation
b. higher unemployment and higher inflation
c. lower unemployment and lower inflation
d. None of the above is necessarily correct.
a
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Some economists argue that increases in government spending are not a likely source of continued inflation because
A) increases in government spending cause reductions in other spending components. B) government spending is not created by the Fed. C) increases in government spending can be financed by money creation. D) a and b E) a and c
Answer the following statement(s) true (T) or false (F)
1. Increased taste for European goods in the United States leads to decreased demand for euros. 2. Any change in the average income of U.S. consumers will also change the equilibrium exchange rate, ceteris paribus. 3. When the dollar depreciates, this means that a dollar can buy more units of foreign currency than before. 4. If Europe experiences a higher inflation rate than does the United States, European products become less expensive to U.S. consumers. 5. Governments were unable to agree on an alternative fixed-rate approach when the Bretton Woods system collapsed.