Unanticipated deflation can create unemployment if
A) nominal wages are sticky, causing real wages to rise over time.
B) nominal wages are flexible, causing people's real incomes to decline.
C) banks refuse to make loans at low nominal interest rates.
D) nominal interest rates remain positive.
A
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When the nominal interest rate is ________ the equilibrium interest rate, the quantity of money demanded is less than the quantity of money supplied; when the nominal interest rate is ________ the equilibrium interest rate, the quantity of money
demanded exceeds the quantity of money supplied. A) equal to; less than B) less than; greater than C) greater than; equal to D) equal to; greater than E) greater than; less than
Because of increasing opportunity costs, the production possibility curve:
A. Is bowed out from (or concave to) the origin B. Can be either downward- or upward-sloping C. At first rises, then falls eventually D. Is a straight downward-sloping line