The aggregate demand curve shows the relationship between inflation and:
A. the exchange rate.
B. short-run equilibrium output.
C. the nominal interest rate.
D. the real interest rate.
Answer: B
Economics
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Why is it difficult to determine whether fluctuations in the target interest rate have led to business cycle fluctuations in the United States, according to the New Keynesian model?
A) Because the Federal Reserve may change the target interest rate according to economic conditions. B) Because the target interest rate is nominal, not real. C) Because inflation is not well measured. D) Because money is neutral.
Economics
Presenting options in a fashion that makes people more likely to make one choice over another is called:
A. choice architecture. B. the ACE model. C. traditional economics D. natural experiments.
Economics