If people eventually adjust their inflation expectations so that in the long run actual and expected inflation are the same, then policymakers
a. can not exploit a tradeoff between inflation and unemployment in either the short or long run.
b. can exploit a tradeoff between inflation and unemployment in the short run but not in the long run.
c. can exploit a tradeoff between inflation and unemployment in both the short run and the long run.
d. can exploit a tradeoff between inflation and unemployment in the long run, but not the short run.
b
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According to the classical dichotomy, which of these magnitudes is affected by monetary policy?
A. the price level B. the real wage C. the real interest rate D. the rate of growth of real GDP
In the foreign-exchange market, trading
A) is restricted to the hours 10 A.M. to 3 P.M. New York time. B) may not take place after 5 P.M. London time. C) takes place at any hour of the night or day. D) takes place at prices set by the U.S. government in consultation with the governments of other leading countries.