According to new classical theory, if the public correctly anticipates a government policy to increase aggregate demand, then the
A) short-run Phillips curve will be upward sloping, but the long-run Phillips curve will be downward-sloping.
B) long-run Phillips curve will be upward sloping, but the short-run Phillips curve will be downward-sloping.
C) short-run Phillips curve will be upward sloping, but the long-run Phillips curve will be vertical.
D) long run Phillips curve will be upward sloping, but the short-run Phillips curve will be vertical.
E) short- and long-run Phillips curves will be vertical.
E
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Which of the following equations correctly represents nominal exchange rate?
A) Nominal exchange rate = units of foreign currency/1 unit of domestic currency B) Nominal exchange rate = 1 unit of domestic currency/100 units of foreign currency C) Nominal exchange rate = 100 units of domestic currency/1 unit of foreign currency D) Nominal exchange rate = units of foreign currency/100 unit of domestic currency
The most likely explanation of the recession of 1981-1982 was
A) an increase in energy prices. B) a collapse in investment spending. C) that it was an unfortunate byproduct of a decrease in inflation. D) a dramatic decrease in stock prices.