A perceived permanent rise in the rate of money growth will cause what long-run effects in the economy?
a. a rise in the nominal rate of interest and a rise in inflation by the same percentage
b. a rise in the nominal rate of interest and a rise in real GDP by the same percentage
c. a fall in the nominal rate of interest and a rise in inflation by the same percentage
d. a fall in the nominal rate of interest and a fall in real GDP by the same percentage
Ans: a. a rise in the nominal rate of interest and a rise in inflation by the same percentage
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Investment and saving are, respectively:
A. income and wealth. B. stocks and flows. C. injections and leakages. D. leakages and injections.
Use the following demand and supply functions: Demand:Qd = 50 - 4PSupply:Qs = 20 + 2PIf the price is $10, there is a
A. surplus of 40 units. B. shortage of 30 units. C. shortage of 10 units. D. surplus of 30 units. E. none of the above