In a simple macroeconomic model, only one component of expenditures is allowed to change:
a. investment.
b. consumption.
c. net exports.
d. government spending.
e. transfer payments.
b
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A flexible or floating exchange rate system is one in which the:
a. government closely monitors and controls the value due to the impact on trade flows. b. government makes no attempt to fix it against any base currency. c. government actively tries to achieve fluctuations in the rate. d. government fixes the rate against the currency of its largest trading partner.
If the actual inflation rate exceeds the expected inflation rate, then: a. the economy is operating along the long-run Phillips curve
b. unemployment exceeds the natural rate. c. maintaining the existing unemployment rate will require increasing inflation in the long run. d. the actual rate will tend to fall toward the expected rate. e. unemployment will tend to decrease in the long run.