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1. Question: Macroeconomics deals with: Your bits and pieces of the economy. Answer: the question of how a business unit should operate profitably. the working of the entire economy or large sectors of it. how individuals make decisions. CORRECT Points 3 of 3 Received: Comments: 2. Question: If the state government allocates additional spending on education, the opportunity cost is: Your zero. Answer: the dollar amount of the additional spending. only considered if additional taxes need to be raised to fund the spending. measured in terms of the alternative uses for that CORRECT money. Points 3 of 3 Received: Comments: 3. Question: The concept of the margin deals with: Your making incremental choices. Answer: one more or one less of something. doing a little more or a little less. all of the above. CORRECT Points 3 of 3 Received: Comments: 4. Question: Which of the following principles underlie the economics of individual choices? Your There are gains from trade. Answer: Markets move toward equilibrium. People usually exploit opportunities to make CORRECT themselves better off. Resources should be used as efficiently as possible to achieve society's goals. Points 3 of 3 Received: Comments: 5. Question: Increases in total output realized when individuals specialize in particular tasks and trade are known as: Your CORRECT the gains from trade. Answer: the profits obtained from sales of a good or service. marginal analysis. a tradeoff. Points 3 of 3 Received: Comments: 6. Question: If equilibrium exists: Your all individuals must have an equal amount of income. Answer: the price in that market will not fluctuate by more than 5%. there will be no remaining opportunities for individuals to make themselves better off. the number of buyers equals the number of sellers. CORRECT Points 3 of 3 Received: Comments: 7. Question: Economists believe that resources should be used as efficiently as possible to: Your achieve society's goals. CORRECT ANSWER Answer: eliminate scarcity. reduce inequity. do all of the above. INCORRECT Points 0 of 3 Received: Comments: 8. Question: When markets fail: Your government intervention may help. Answer: the market realizes the maximum possible gains from trade given the available resources. there may still be an efficient allocation of resources. no goods and services are produced. Points 3 of 3 Received: CORRECT 9. Comments: Question: When moving along a production possibilities curve, the opportunity cost to society of getting more of one good: Your is constant. Answer: is measured in dollar terms. is measured by the amount of the other good that CORRECT must be given up. usually decreases. Points 3 of 3 Received: Comments: 10. Question: The fact that a society's production possibilities curve is bowed out or concave to the origin of a graph demonstrates the law of: Your increasing opportunity cost. CORRECT Answer: decreasing opportunity cost. constant opportunity cost. concave opportunity cost. Points 3 of 3 Received: Comments: 11. Question: If an economy is producing a level of output that is on its production possibilities curve, the economy: Your has idle resources. Answer: has idle resources but is using resources efficiently. has no idle resources but is using resources inefficiently. has no idle resources and is using resources CORRECT efficiently. Points 3 of 3 Received: Comments: 12. Question: Technological improvements will: Your leave the production possibilities curve unchanged. Answer: shift the production possibilities curve inward. shift the production possibilities curve outward. necessarily lead to increased unemployment. Points 3 of 3 CORRECT Received: Comments: 13. Question: An economy that has the lowest opportunity cost for producing a particular good is said to have a(n): Your absolute advantage. Answer: CORRECT ANSWER comparative advantage. production possibilities curve. increasing opportunity cost. INCORRECT Points 0 of 3 Received: Comments: 14. Question: The concept of comparative advantage is based upon: Your absolute labor productivity. Answer: relative labor costs. dollar prices of labor. relative opportunity costs. CORRECT Points 3 of 3 Received: Comments: 15. Question: An economy is said to have a comparative advantage in the production of a good if it can produce that good: Your with more resources than another economy. Answer: with a higher opportunity cost than another economy. outside its production possibilities curve. at a lower opportunity cost than another economy. CORRECT Points 3 of 3 Received: Comments: 16. Question: An example of a positive statement is: Your The rate of unemployment is 4 percent. Answer: A high rate of economic growth is good for the country. Everyone in the country needs to be covered by national health insurance. Baseball players should not be paid higher salaries than the president of the United States. Points 3 of 3 Received: CORRECT 17. Comments: Question: The primary difference between a change in demand and a change in the quantity demanded is: Your a change in demand is a movement along the demand Answer: curve and a change in quantity demanded is a shift in the demand curve. a change in quantity demanded is a movement along the demand curve and a change in demand is a shift CORRECT in the demand curve. both a change in quantity demanded and a change in demand are shifts in the demand curve, only in different directions. both a change in quantity demanded and a change in demand are movements along the demand curve, only in different directions. Points 3 of 3 Received: Comments: 18. Question: If people demand more of product A when the price of B falls, then A and B are: Your not related. Answer: substitutes. complements. CORRECT inferior. Points 3 of 3 Received: Comments: 19. Question: Given that chicken and beef are substitute goods, if the price of chicken decreases substantially, there would be: Your an increase in the demand for beef. Answer: CORRECT a decrease in the demand for beef. a decrease in the quantity of beef demanded. no change in the demand for beef. Points 3 of 3 Received: Comments: 20. Question: For most goods, purchases tend to rise with increases in buyers' incomes and to fall with decreases in buyers' incomes. Such goods are known as: Your inferior goods. Answer: direct goods. normal goods. CORRECT indirect goods. Points 3 of 3 Received: Comments: 21. Question: A decrease in supply means: Your CORRECT a shift to the left of the entire supply curve. Answer: ANSWER moving downward (to the left) along the supply curve with lower prices. less will be demanded at every price. INCORRECT more will be supplied at every price. Points 0 of 3 Received: Comments: 22. Question: The primary difference between a change in supply and a change in the quantity supplied is: Your a change in quantity supplied is a movement along Answer: CORRECT the supply curve, while a change in supply is a shift in the supply curve. both a change in quantity supplied and a change in supply are movements along the supply curve, only in different directions. a change in supply is related to the supply curve, while a change in quantity supplied is related to shifts in the demand curve that elicit a change in supply. a change in supply is a movement along the supply curve, while a change in quantity supplied is a shift in the supply curve. Points 3 of 3 Received: Comments: 23. Question: If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price: Your is above the market equilibrium price. CORRECT Answer: will rise to clear the market. will either rise or remain unchanged. is below the market equilibrium price. Points 3 of 3 Received: Comments: 24. Question: An increase in demand, with no change in supply, will lead to ________ in equilibrium quantity and ________ in equilibrium price. Your an increase; an increase CORRECT Answer: an increase; a decrease a decrease; an increase a decrease; a decrease Points 3 of 3 Received: Comments: 25. Question: Suppose that the average cost of a doctor's visit is $100. If the government imposes a price ceiling of $50 on the cost of a doctor's visit, there will be: Your an excess supply of doctor's visits. Answer: CORRECT an excess demand for doctor's visits. ANSWER an increase in the equilibrium number of INCORRECT doctor's visits. no change in the number of doctor's visits. Points 0 of 3 Received: Comments: 26. Question: The government decides to impose a price ceiling on a good, because it thinks the market determined price is “too high.” If it imposes the price ceiling above the equilibrium price: Your consumers will respond to the higher price and therefore Answer: wish to purchase less of the good than at the equilibrium price. producers will respond to the higher price and therefore offer fewer units for sale. consumers will purchase less of the good after the price ceiling is imposed. there will be no change to either the price of quantity CORRECT in the market. Points 3 of 3 Received: Comments: 27. Question: A price ceiling will have no effect if: Your Answer: CORRECT it is set above the equilibrium price. the equilibrium price is above the price ceiling. set below the equilibrium price. it creates a shortage. Points 3 of 3 Received: Comments: 28. Question: In a black market, goods or services are bought and sold: Your at night. Answer: without any information about quality. without any information about price. illegally. CORRECT Points 3 of 3 Received: Comments: 29. Question: The modern tools of macroeconomic stabilization are ______. Your tax policy and government spending policy Answer: CORRECT fiscal policy and monetary policy monetary policy and exchange rate policy capital policy and labor policy Points 3 of 3 Received: Comments: 30. Question: An example of an economic aggregate is ______. Your the average salary of a graduate from the Answer: Columbia graduate school of business the federal personal income tax rate for married individuals CORRECT the amount that households, firms, and the ANSWER government save in a given year the value of all cars produced by General Motors INCORRECT during a year Points 0 of 3 Received: Comments: 31. Question: The unemployment rate is ______. Your the percent of the labor force that is unemployed CORRECT Answer: the number of people unemployed the ratio of the labor force to the number of people unemployed the average length of time someone is unemployed Points 3 of 3 Received: Comments: 32. Question: A business cycle is ______. Your a very deep and prolonged economic downturn Answer: a period in which output and employment are rising a period in which output and employment are falling a short-run alternation between economic upturns and downturns CORRECT Points 3 of 3 Received: Comments: 33. Question: The trade balance is the difference between the value of the _______. Your trade deficit and the budget deficit Answer: goods and services that one country sells to other countries and the value of the goods and services it buys in return exchange rates of two countries that are engaged in international trade national debt and the foreign debt CORRECT Points 3 of 3 Received: Comments: 34. Question: Because capital flows allow some countries to spend more on additions to their productive capacity than they would have been able without capital flows, in the long run, they experience ______. Your higher interest rates Answer: higher inflation a higher standard of living CORRECT none of the above Points 3 of 3 Received: Comments: 35. Question: Which of the following would NOT be considered a government transfer? Your Answer: unemployment compensation food stamps payments by the Defense Department for a new weapons system Medicare benefits paid to someone who is indigent CORRECT Points 3 of 3 Received: Comments: 36. Question: Investment spending represents spending on ______. Your productive physical capital CORRECT Answer: stocks mutual funds corporate bonds Points 3 of 3 Received: Comments: 37. Question: The purchases of which of the following goods are included in GDP? Your used goods INCORRECT Answer: newly issued stocks foreign-produced investment goods capital goods CORRECT ANSWER Points 0 of 3 Received: Comments: 38. Question: During a recession ______. Your unemployment and the growth rate of real GDP both Answer: decrease unemployment decreases and the growth rate of real GDP increases unemployment increases and the growth rate of real GDP decreases there is no relationship between unemployment and the growth rate of real GDP Points 3 of 3 Received: Comments: 39. Question: Discouraged workers are those individuals ______. CORRECT Your Answer: who are getting paid too little who do not like their jobs who are working part time but are looking for a fulltime job who have given up looking for a job CORRECT Points 3 of 3 Received: Comments: 40. Question: The major difference between the Consumer Price Index and the Producer Price Index is that ______. Your the PPI is based on retail prices and CPI is based on Answer: wholesale prices the PPI measures the cost of living of self-employed workers and the CPI measures the cost of living of salaried workers the PPI generally registers a higher rate of inflation than the CPI the PPI is based on the cost of a basket typically purchased by producers, while the CPI is based on CORRECT the cost of a basket typically purchased by consumers Points 3 of 3 Received: Comments: 41. Question: The rule of 70 states that ______. Your the average score on standardized tests is normally Answer: distributed with a mean of 70 and a standard deviation of 10 everyone should retire by age 70 the number of years for a variable to double equals 70 divided by its annual growth rate Social Security benefits should increase when people reach 70 Points 3 of 3 Received: Comments: 42. Question: Long-run economic growth depends almost entirely on ______. Your CORRECT labor productivity growth Answer: population growth agricultural production growth CORRECT number of hours worked Points 3 of 3 Received: Comments: 43. Question: For developed countries, which of the following would be considered the most important drive in productivity growth? Your educational level of attainment Answer: the amount of physical capital technology CORRECT the abundance of natural resources Points 3 of 3 Received: Comments: 44. Question: If technology advances, then ______. Your more output can be obtained from the same inputs CORRECT Answer: more inputs are needed to produce the same output less output can be obtained from the same inputs less can be obtained even with more inputs Points 3 of 3 Received: Comments: 45. Question: Growth accounting estimates the _____. Your increase in the population rate over time Answer: increase in the inflation rate over time contribution of each major factor in the aggregate production function to economic growth contribution of the technology factor in the aggregate production function to economic growth CORRECT Points 3 of 3 Received: Comments: 46. Question: According to the text, productivity is driven by all of the following below EXCEPT ______. Your physical capital Answer: human capital technological progress natural resources CORRECT Points 3 of 3 Received: Comments: 47. Question: Sources of funds for investment spending are ______. Your savings by households, government, and Answer: foreigners taxes and transfer payments CORRECT ANSWER INCORRECT always equal to U.S. spending on imports directed to their most productive uses by the U.S. government Points 0 of 3 Received: Comments: 48. Question: The budget balance is equal to ______. Your taxes minus government transfers minus Answer: government spending taxes minus government spending CORRECT government spending minus taxes taxes plus government spending minus government transfers Points 3 of 3 Received: Comments: 49. Question: Capital inflows represent _______. Your the net inflow of funds into a country Answer: the net outflow of funds from a country the amount that domestic savings exceeds foreign savings the excess of domestic physical capital exported minus the amount of physical capital imported CORRECT Points 3 of 3 Received: Comments: 50. Question: A business will want to borrow to undertake an investment project when the rate of return on that project is _______. Your less than the interest rate Answer: greater than the interest rate CORRECT greater than the exchange rate equal to the inflation rate Points 3 of 3 Received: Comments: 51. Question: The loanable funds market maximizes ______. Your the interest rate to savers Answer: the rate of return by borrowers the gains from trade between lenders and borrowers CORRECT the amount of investment spending in the economy Points 3 of 3 Received: Comments: 52. Question: In financial markets ______. Your households sell liabilities Answer: wealth is transformed into savings households purchase financial assets CORRECT physical assets exchange hands Points 3 of 3 Received: Comments: 53. Question: A loan is ______. Your a liability for the lender and an asset for the borrower Answer: a physical asset that is traded in financial markets a claim on a bank that obliges the bank to provide funds to a lender a liability for the borrower and an asset for the lender Points 3 of 3 Received: Comments: 54. Question: Among financial intermediaries are ______. Your mutual funds Answer: pension funds insurance companies all of the above CORRECT CORRECT Points 3 of 3 Received: Comments: 55. Question: The aggregate supply curve shows the relationship between ______. Your the price of oil and the quantity of aggregate output Answer: supplied the aggregate price level and the quantity of CORRECT aggregate output supplied the price of money and the quantity of aggregate output supplied the level of employment and the quantity of aggregate output supplied Points 3 of 3 Received: Comments: 56. Question: Stagflation is a combination of ______. Your increasing unemployment and increasing inflation CORRECT Answer: decreasing unemployment and decreasing inflation increasing unemployment and decreasing inflation decreasing unemployment and increasing inflation Points 3 of 3 Received: Comments: 57. Question: The positive relationship between the aggregate price level and aggregate output supplied gives the short-run aggregate supply curve ______. Your an upward slope CORRECT Answer: a vertical slope a horizontal slope a downward slope Points 3 of 3 Received: Comments: 58. Question: An increase in the aggregate price level will increase ______. Your short-run aggregate supply Answer: the quantity of aggregate output supplied in the short run aggregate demand the quantity of aggregate output demanded CORRECT Points 3 of 3 Received: Comments: 59. Question: The interest rate effect of an aggregate price level change causes ______. Your the long-run aggregate supply curve to be Answer: vertical the aggregate demand curve to be negatively CORRECT ANSWER sloped the short-run aggregate supply curve to be INCORRECT positively sloped the aggregate demand curve to be positively sloped Points 0 of 3 Received: Comments: 60. Question: Suppose that the stock market crashes. Which of the following is most likely to occur? Your the aggregate demand curve shifts to the right Answer: the aggregate demand curve shifts to the left CORRECT a movement up the aggregate demand curve a movement down the aggregate demand curve Points 3 of 3 Received: Comments: 61. Question: The marginal propensity to consume is ______. Your increasing if the marginal propensity to save is Answer: increasing the proportion of total disposable income that the average family consumes the change in consumer spending divided by the change in aggregate disposable income the change in consumer spending less the change in aggregate disposable income Points 3 of 3 Received: Comments: 62. Question: In the short run, a positive demand shock _____. Your reduces aggregate output and increases the Answer: aggregate price level increases aggregate output and reduces the CORRECT aggregate price level reduces aggregate output and the aggregate INCORRECT price level increases aggregate output and the aggregate CORRECT ANSWER price level Points 0 of 3 Received: Comments: 63. Question: Which of the following is a government transfer? Your wages paid to U.S. senators Answer: purchases of tanks for the army Social Security payments to retired postal workers payments to contractors for repairs on interstate highways CORRECT Points 3 of 3 Received: Comments: 64. Question: A government might want to increase aggregate demand to ______. Your close an inflationary gap Answer: CORRECT close a recessionary gap lower prices in the economy lower employment in the economy Points 3 of 3 Received: Comments: 65. Question: All of the following are examples of fiscal policy EXCEPT ______. Your increasing the reimbursement amounts under Medicaid Answer: reducing the money supply in order to raise the interest rate increasing the personal income tax deductions for home ownership reducing federal subsidies to state universities Points 3 of 3 Received: Comments: 66. Question: Time lags suggest that ______. Your increases in spending to fight a recessionary gap can be Answer: timed correctly CORRECT increases in spending to fight a recessionary gay may occur too early increases in spending to fight a recessionary gap may CORRECT occur too late none of the above is correct Points 3 of 3 Received: Comments: 67. Question: Government spending and taxation rules that cause fiscal policy to be expansionary when the economy contracts and contractionary when the economy expands are known as ______. Your discretionary fiscal policy Answer: CORRECT automatic stabilizers autonomous spending policies destabilizing fiscal policies Points 3 of 3 Received: Comments: 68. Question: Expansionary fiscal policies ______. Your make the budget surplus smaller CORRECT Answer: make the budget deficit smaller affect only taxes affect only government spending Points 3 of 3 Received: Comments: 69. Question: Most economists believe that a balanced budget would ______. Your undermine the role of taxes and transfers as Answer: automatic stabilizers enhance the effect of automatic stabilizers in the economy strengthen the ability of policy makers to conduct discretionary fiscal policy not have any impact on the role of taxes and transfers as automatic stabilizers Points 3 of 3 Received: Comments: CORRECT 70. Question: Commodity-backed money is ______. Your a medium of exchange with some intrinsic Answer: value equivalent to commodity money a medium of exchange which has alternative economic uses none of the above CORRECT ANSWER INCORRECT Points 0 of 3 Received: Comments: 71. Question: Money whose value derives entirely from its official status as a means of exchange is known as ______. Your commodity money Answer: commodity-backed money fiat money CORRECT bank reserves Points 3 of 3 Received: Comments: 72. Question: The existence of banks ______. Your results in the money supply being larger than the Answer: amount of currency in circulation inhibits the creation of money makes the money supply equal to the amount of currency in circulation results in the money supply being less than the amount of currency in circulation Points 3 of 3 Received: Comments: 73. Question: The Fed controls _______. Your the discount rate Answer: the monetary base the reserve ratio all of the above Points 3 of 3 Received: Comments: CORRECT CORRECT 74. Question: The three main monetary policy tools are ______. Your interest rates, taxes, government purchases, and Answer: transfers currency, near-moneys, and reserve ratio deposit insurance, discount rate, and money multiplier reserve requirements, the discount rate, and openmarket purchases CORRECT Points 3 of 3 Received: Comments: 75. Question: Open-market operations occur when the Fed _______. Your buys U.S. Treasury bills from the federal Answer: government buys or sells U.S. Treasury bills buys or sells existing U.S. Treasury bills does all of the above CORRECT ANSWER INCORRECT Points 0 of 3 Received: Comments: 76. Question: If the Fed conducts an open-market purchase _______. Your bank reserves decrease and the money supply decreases Answer: bank reserves increase and the money supply increases bank reserves decrease and the money supply increases CORRECT bank reserves increase and the money supply decreases Points 3 of 3 Received: Comments: 77. Question: The federal funds rate is the interest rate on ______, and is controlled by the _______. Your loans from the Fed to banks; Federal Open INCORRECT Answer: Market Committee CORRECT reserves that banks lend to each other; ANSWER Federal Open Market Committee loans from the Fed to banks; President and Congress reserves that banks lend to each other; President and Congress Points 0 of 3 Received: Comments: 78. Question: The amount of money that people demand is ______. Your positively related to the interest rate Answer: independent the interest rate negatively related to the interest rate INCORRECT CORRECT ANSWER positively related or negatively related to the interest rate depending on the state of the economy Points 0 of 3 Received: Comments: 79. Question: The real quantity of money is the _______. Your nominal quantity of money divided by the aggregate Answer: price level aggregate price level divided by the nominal quantity of money nominal quantity of money times the aggregate price level nominal quantity of money divided by the interest rate CORRECT Points 3 of 3 Received: Comments: 80. Question: If the Fed wants to decrease interest rates, it can ______. Your decrease the money supply by selling Treasury bills Answer: decrease the money supply by buying Treasury bills increase the money supply by selling Treasury bills increase the money supply by buying Treasury bills CORRECT Points 3 of 3 Received: Comments: 81. Question: The main objective of contractionary monetary policy is to ______. Your CORRECT ANSWER decrease aggregate demand Answer: close a recessionary gap increase investment raise the level of potential output INCORRECT Points 0 of 3 Received: Comments: 82. Question: An increase in interest rates will lead to a(n) ______. Your decrease in aggregate demand CORRECT ANSWER Answer: increase in aggregate demand increase in aggregate supply increase in the money supply INCORRECT Points 0 of 3 Received: Comments: 83. Question: According to the loanable funds model, contractionary monetary policy _______. Your shifts the demand curve for loanable funds to the right Answer: shifts the supply curve for loanable funds to the right shifts the demand curve for loanable funds to the left shifts the supply curve for loanable funds to the left CORRECT Points 3 of 3 Received: Comments: 84. Question: In the long run, an increase in the quantity of money _______. Your increases real output Answer: increases prices but not long-run output CORRECT increases real interest rates has no impact on the economy Points 3 of 3 Received: Comments: 85. Question: The Humphrey-Hawkins Act of 1978 defined full employment of ____ unemployment. Your 0% Answer: 4% CORRECT 5% 10% Points 3 of 3 Received: 86. Comments: Question: To be counted as unemployed, one must ______. Your have had a job previously Answer: be actively looking for a job CORRECT have had a job before and be actively looking for work be out of work Points 3 of 3 Received: Comments: 87. Question: The labor demand curve is negatively sloped because _______. Your more people are willing to work at lower wages than at Answer: higher wages more people are willing to work at higher wages than at lower wages employers are willing to hire more people at lower wages employers are willing to hire more people at higher wages CORRECT Points 3 of 3 Received: Comments: 88. Question: If a worker becomes unemployed due to an increase in the minimum wage, that worker is ______. Your frictionally unemployed Answer: structurally unemployed CORRECT cyclically unemployed engaged in job search Points 3 of 3 Received: Comments: 89. Question: Generous unemployment benefits are likely to have which of the following consequences? Your an increase in the employment level Answer: a reduction in job search time a decrease in the unemployment rate an increase in the unemployment rate CORRECT Points 3 of 3 Received: Comments: 90. Question: Which of the following is likely to lead to a large number of discouraged workers? Your when the economy is expanding Answer: CORRECT when the availability of jobs falls when the economy is experiencing inflation when the economy is experiencing deflation Points 3 of 3 Received: Comments: 91. Question: Which of the following is NOT one of the explanations for why the labor market does not move quickly to equilibrium? Your CORRECT Wages fall quickly in the faces of surpluses. Answer: ANSWER Wages are sticky. Workers are slow to realize that the equilibrium INCORRECT wage has changed. Wages in the labor market behave differently from the prices of many goods and services. Points 0 of 3 Received: Comments: 92. Question: Wages tend to be stickier when _______. Your wages are rising Answer: CORRECT wages are falling the unemployment rate is low the economy is growing Points 3 of 3 Received: Comments: 93. Question: Inflation doesn't reduce purchasing power if ______. Your price of essential products, such as food and gasoline, Answer: don't increase too much it causes an increase in nominal wages it remains under 10% per year the Federal Reserve increases the money supply enough to offset it CORRECT Points 3 of 3 Received: Comments: 94. Question: In the short run, an increase in aggregate demand from a position of full employment leads to ______. Your higher prices and higher unemployment Answer: CORRECT higher prices and higher output lower prices and higher output lower prices and higher unemployment Points 3 of 3 Received: Comments: 95. Question: The inflation tax is ______. Your the increase in the real value of money held by the Answer: public caused by inflation the decrease in the real value of money held by the public caused by inflation the result of the indexing wages to inflation CORRECT cost of living adjustments, or COLAS Points 3 of 3 Received: Comments: 96. Question: The government debt is monetized when the ______. Your Treasury mints new currency in order to buy Treasury Answer: bills back Fed conducts open-market purchases Fed transfers part of its financial reserves to the Treasury, who in turn buys Treasury bills back Fed sells Treasury bills in the bond market Points 3 of 3 Received: Comments: 97. Question: If the expected inflation rate rises, then the ______. Your real interest rate rises INCORRECT Answer: real interest rate falls nominal interest rate falls nominal interest rate rises CORRECT ANSWER CORRECT Points 0 of 3 Received: Comments: 98. Question: Shoe leather costs refer to the ______. Your effect of inflation on the prices of food, clothes, and Answer: other necessities increased cost of transactions due to inflation CORRECT high price of leather goods effect of inflation on transportation costs Points 3 of 3 Received: Comments: 99. Question: Disinflation means a decrease in _______. Your prices Answer: the rate of inflation CORRECT aggregate supply the money supply Points 3 of 3 Received: Comments: 100. Question: There is a zero bound to which of the following interest rates? Your real interest rates Answer: nominal interest rates both real and nominal interest rates There is no zero bound on either nominal or real interest rates. Points 3 of 3 Received: Comments: \ CORRECT