In September 2008, the MONTHLY rate of inflation in Zimbabwe approached 489 BILLION percent. An inflation rate such as this would:
A. seriously disrupt normal commerce.
B. decrease the natural rate of unemployment.
C. be too high to calculate using the CPI.
D. All of these
Answer: A
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Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What might the U.S. Federal Reserve do to offset the macroeconomic effect of the leftward shift in the U.S. IS curve?
A) It would increase the money supply. B) It would decrease the money supply. C) It would not change its monetary policy. D) It would not change its fiscal policy
When the equilibrium price level adjusts to an increase in autonomous investment spending, the impact of the multiplier effect resulting from that spending increase
A) will increase nominal GDP by an amount smaller than the multiplier effect would indicate. B) is only felt when there are changes in consumption. C) will increase real GDP by an amount smaller than the multiplier effect would indicate. D) will have no impact on the real GDP.