13) As I mentioned in class a few times, Brazil experienced annual inflation rates above 100% during the time I went to college. To protect myself from losses caused by inflation and save enough to afford a trip after graduation, I chose to periodically buy US dollars (USD) with the income I managed to save each month. When I was about to graduate, I sold the dollars and used the Brazilian currency (BRL) to pay for my trip. This story illustrates the fact that: A) In Brazil, money was neutral in the long run, but not in the short run B) In Brazil, money was neutral in the short run, but not in the long run C) The BRL lost its function as a medium of exchange but kept its function as astore of value D) The BRL lost its function as a store of value but kept its function as a medium of exchange 14) According to Keynes, people may hold more currency than needed for transactions, despite the fact that money does not earn interest: A) Because saving accounts lose real value due to inflation B) Because checking account deposits lose value due to inflation C) Because all bank deposits lose value due to changes in interest rates D) Because currency provides liquidity services 15) Large differences in inflation rates among countries are almost always the result of large differences in A) the growth rates of real money demand. B) real income growth. C) the growth rates of nominal money supplies. D) productivity. 16) The key difference between classical and Keynesian macroeconomists is their differing beliefs about A) the full-employment level of output. B) the speed at which prices adjust. C) the slope of the aggregate demand curve. D) the natural rate of unemployment. 17) Real business cycle theorists think that most business cycle fluctuations are caused by A) changes in the population growth rate, which eventually affect labor-supply decisions B) changes in the money supply, which affect interest rates and therefore the willingness to produce C) changes in the money supply, which affect interest rates and thus agents' spending and saving decisions D) changes in the amount of factors of production or their efficiency in generating output/profits E) the real quantity of government purchases, since business cycle fluctuations impact the deficit 18) The Industrial Revolution can be viewed primarily as A) a positive supply shock that increased the marginal product of labor, shifting labor demand to the right and increasing real wages B) a positive demand shock that increased the labor supply and lowered wages, leading to and increase in profits, economic growth and inflation C) a program of large and persistent increases in the money supply, which kept interest rates low, stimulated industrial investment, economic growth, and widespread wage increases D) a series of rebellions agains poor working conditions in the UK in the 18th century which has been credited with the rise of labor unions and improving living conditions for workers around the world E) all the above 19) The efficiency wage model can be modified to allow real wages to vary over the business cycle by assuming that A) during a recession, labor supply will decrease, reducing the efficiency wage. B) workers' effort may depend on the employees unemployment rate & the real wage. ( ) during a boom, labor demand will increase, causing the efficiency wage to rise. D) during a recession, Productivity will fall, causing a reduction in the efficiency wage