Macroeconomics. True/False Questions. Please answer all questions and give brief explanation. The short-run nominal interest rate decreases and the long-run nominal interest rate increases when the central bank increases money supply.
-
The short-run nominal interest rate decreases and the long-run nominal interest rate increases when the central bank increases money supply.
-
The tax multiplier is larger than the government spending multiplier.
-
According to the Pigou effect, a decrease in price leads to an increase in output.
-
Under a small open economy model with floating exchange rates, an increase in money supply leads to an increase in investment and output.
-
In theory, an increase in country risk premium leads to a decrease in investment and output.
-
Under the closed economy model, if money demand does not depend on the interest rate, the LM curve is vertical.
-
The (negative) tradeoff between inflation and
unemployment holds only in the short run. -
According to the life cycle model, population aging (the fraction of the population that is elderly increases) leads to a decrease in national saving.
-
According to Tobin’s q, a decrease in stock price leads to a decrease in investment and output.
-
An increase in the real interest rate increases the inventory investment.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
