If nominal gross domestic product fell while real gross domestic product rose, which of the following must be true?
a) unemployment increased
b) the inflation rate was negative
c) net exports were negative
d) the average of stock prices rose while bond prices fell
e) nominal interest rates by less than the rate of inflation
Ans: b) the inflation rate was negative
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The decrease in the price of gasoline to a national average of less than $3.20 during the summer of 2012 was most likely a result of
A) an increase in demand due to reduced summer driving. B) an increase in supply resulting from higher refinery output. C) an increase in demand due to increase in summer driving along with a decrease in supply resulting from reduced refinery output. D) an increase in supply resulting from higher refinery output along with a decrease in demand in summer driving.
If the interest rate of a foreign country is less than that of the domestic country, then the foreign country should have a positive forward premium on its currency.
Answer the following statement true (T) or false (F)