During a presidential campaign, the incumbent argues that he should be reelected because nominal GDP grew by 12 percent during his 4-year term in office. You know that population grew by 4 percent over the period and that the GDP deflator increased by 6 percent during the past 4 years. You should conclude that real GDP per person
a. grew by more than 12 percent.
b. grew, but by less than 12 percent.
c. was unchanged.
d. decreased.
b
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A perceived permanent rise in the rate of money growth will cause what long-run effects in the economy?
a. a rise in the nominal rate of interest and a rise in inflation by the same percentage b. a rise in the nominal rate of interest and a rise in real GDP by the same percentage c. a fall in the nominal rate of interest and a rise in inflation by the same percentage d. a fall in the nominal rate of interest and a fall in real GDP by the same percentage
The Fed:
a. has little control over the money supply. b. serves as the central bank for the United States. c. often uses a mix of lower taxes in its fiscal policy. d. ensures commercial bank profitability.