According to the Phillips curve unemployment will return to the natural rate when ? A. Nominal wages are equal to expected wages B. Real wages are back at equilibrium level C. Nominal wages are growing faster than inflation D. Inflation…
Menu costs in relation to inflation refers to ? A. Costs of finding better rates of returnB. Costs of altering price lists C. Costs of money increasing its value D. Costs of revaluing the currency
An increase in costs will ? A. Shift aggregate demandB. Shift aggregate supply C. Reduce the natural rate of unemployment D. Increase the productivity of employees
An increase in injections into the economy may lead to ? A. An outward shift of aggregate demand- and demand-pull inflation B. An outward shift of aggregate demand and cost push inflation C. An outward shift of aggregate supply and…
Demand pull inflation may be caused by ? A. An increase in costsB. A reduction in interest rate C. A reduction in government spending D. An outward shift in aggregate supply
If borrowers and lenders agree on a nominal interest rate and inflation turns out to be less than they had expected ? A. neither borrowers nor lenders will gain because the nominal interest rate has been fixed by contract B.…
Under which of the following conditions would you prefer to be the lender ? A. The nominal rate of interest is 15 percent and the inflation rate is 14 percent B. The nominal rate of interest is 20 percent and…
If the nominal interest rate is 7 percent and the inflation rate is 3 percent, then the real interest rate is ? A. 4 percent B. 10 percent C. -4 percent D. 3 percent E. 21 percent
Refer to Figure 24-1 What is the value of the basket in the base year ? A. Rs459.25 B. Rs418.75C. Rs300 D. None of these
The “basket” on which the CPI is based is composed of ? A. consumer productionB. Products purchased by the typical consumer C. raw materials purchased by firms D. total current production E. none of these answers