The classical dichotomy argues that changes in the money supply
a. affect both nominal and real variables.
b. affect neither nominal nor real variables.
c. affect nominal variables, but not real variables.
d. do not affect nominal variables, but do affect real variables.
c
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According to the textbook, the dramatic global shift toward market capitalist economies in the 1980s and 1990s is in large part the result of:
A) an emphasis on individual ownership and decision making power yielding freedom not available under socialist systems. B) the philosophical and theoretical arguments of communism and socialism being finally proved correct. C) the realization that government controls will allocate resources on the basis of comparative advantage. D) a shift to more capital-intensive production.
Given the accelerationist Phillips curve ?? = - 0.3 (U - 6 ) + ?, suppose that inflation in the preceding period was 3 percent, unemployment is 6 percent, and there is a price shock of 2 percent. The current inflation rate is ________
A) 3 percent B) 0.2 percent C) 5 percent D) 1 percent E) none of the above