Suppose a U.S. automaker builds and operates a new factory in Italy. Future production from such an investment will
a. increase Italian GDP more than it increases Italian GNP.
b. increase Italian GNP more than it increases Italian GDP.
c. have no affect on Italian GNP, but will increase Italian GDP.
d. have no affect on either Italian GDP or GNP.
a
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Which of the following best explains the negative slope of the short-run Phillips curve?
A) Short-run aggregate supply increases at the same pace as aggregate demand increases so that inflation and unemployment do not change. B) Weak growth in aggregate demand keeps the economy below potential GDP, so unemployment rises but inflation falls. C) Aggregate demand grows so quickly that the inflation rate rises as unemployment rises. D) Long-run aggregate supply increases quickly enough that inflation falls as unemployment also falls.
Goal independence is the ability of ________ to set monetary policy ________
A) the central bank; goals B) Congress; goals C) Congress; instruments D) the central bank; instruments