Exam 9: A : an Introduction to Basic Macroeconomic Markets

When prices rise, consumers and businesses hold larger money balances. This reduces the supply of loanable funds, increases the interest rate, and discourages both consumption and investment. This process is called the

If the expected rate of inflation is zero, the

The vertical long-run aggregate supply curve reflects the fact that in the long run, an increase in the price level

Within the framework of the AD/AS model, when the current price level in the goods and services market is above the level anticipated at the time decision makers agreed to long-term resource contracts,

People anticipate inflation will be 3 percent during the next several years. If this is true, when the real interest rate is 4 percent, the money interest rate will be

If a nation's currency depreciates, this will tend to

Other things constant, an increase in the expected inflation rate will

The actual rate of unemployment will be greater than the natural rate of unemployment when

If the quantity supplied of euro were greater than the quantity demanded, then the price of the

If the dollar price of the English pound goes from $1.50 to $1.75, the dollar has

If a U.S. dollar exchanges for 10 Mexican Pesos, the dollar price of a Peso is

If the actual price level is lower than the expected price level reflected in long-term contracts,

Which of the following situations would you prefer if you planned to borrow money?

An unanticipated reduction in the level of prices in the goods and services market, which results in a temporary increase in real wage rates, will

A positive nominal interest rate indicates

If the quantity of euro demanded were greater than the quantity supplied, then the price of the

Within the aggregate demand/aggregate supply framework, the quantity produced and purchased in the goods and services market represents

If a reform of the tax laws encourages greater saving, the result would be

The exchange rate is

The price that a person must pay in order acquire purchasing power now rather than in the future is called