Assume that the professors at a local college have gone without a pay increase for 4 years during a tough time. Suppose that things start to look up and the President of the college wants to make up for lost time. If the CPI in 2002 was 150 and 175 in 2006, how much will salaries have to increase to bring the faculty back up to their real income from 2002?

The increase in government spending on unemployment insurance payments to workers who lost their jobs during a recession and the decrease in government spending on unemployment insurance payments to workers during an expansion are examples of

A) discretionary fiscal policy. B) discretionary monetary policy. C) automatic stabilizers. D) automatic monetary policy.

Purchases and sales of government securities by the Federal Reserve are called

A) discount loans. B) federal fund transfers. C) open market operations. D) swap transactions.