International trade allows countries to:
a. produce outside their PPF.
b. produce inside their PPF.
c. consume inside their PPF.
d. consume outside their PPF.
Ans: d. consume outside their PPF.
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Which of the following statements about inflation targeting is true?
a. Inflation targeting allows the central bank to achieve multiple goals like low unemployment and economic growth. b. Inflation targeting has not been adopted by the Fed. c. A central bank that adopts inflation targeting is intrinsically dependent on fiscal policy. d. Inflation targeting decreases the perceived uncertainty derived from the central bank's course of action. e. Inflation targeting increases the uncertainty associated with the central bank's course of action.
Firms often seek to borrow money to expand their capital stock, and the price they pay for the money is the interest rate. What happens to supply of money if the interest rate increases?
a. It increases. b. It decreases. c. It does not change. d. Uncertain-economic theory has no answer to this question.