Midwest State University in Nebraska is trying to convince Nebraska taxpayers that the tax dollars spent at Midwest State University are well spent. One of the university's arguments is that for every $1 spent by Midwest State University an additional $5 of expenditures are generated within Nebraska. Midwest State University is arguing that the multiplier for their expenditures is

Assuming all else equal, if the Fed is expected to adopt a contractionary monetary policy, ________

A) labor demand will increase B) inflation expectations will increase C) the long-run real interest rate will increase D) labor supply will increase

If the real interest rate is 6 percent and the price level is falling at a rate of 2 percent, what is the nominal interest rate?

a. 4 percent b. 6 percent c. 8 percent d. 10 percent