Suppose the U.S. economy is producing at the natural rate of output. A depreciation of the U.S. dollar will cause ________ in real GDP in the short run and ________ in inflation in the long run, everything else held constant
(Assume the depreciation causes no effects in the supply side of the economy.) A) an increase; an increase
B) a decrease; a decrease
C) no change; an increase
D) no change; a decrease
A
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Property and casualty insurance companies tend to invest heavily in municipal bonds because
A) the bonds have higher yields than corporate bonds. B) property and casualty insurance companies are required by regulators to hold at least 20 percent of their assets in the form of municipal bonds. C) the bonds are tax-exempt. D) they hold large state and local government pension funds, thus requiring them to hold an equal amount of municipal bonds.
Macroeconomics is a branch of economics that studies: a. the different costs associated with production
b. the price and output decisions made by different industries. c. the overall performance of the economy. d. the role of a market in determining an efficient outcome. e. the role of input suppliers in determining the price and quantity of output.