According to classical economics:

both real GDP and price level are determined by aggregate supply.

both real GDP and price level are determined by aggregate demand.

real GDP is determined by aggregate demand, while the equilibrium price level is determined by aggregate supply.

real GDP is determined by aggregate supply, while the equilibrium price level is determined by aggregate demand.

price level cannot be changed as prices and wages are perfectly rigid.

All members of the Federal Board of Governors are appointed by the president and confirmed by the Senate.

True

False

The government sector sells resource services to households and buys goods and services from firms.

True

False

A by-product of the acceptance of the Keynesian school was the wide approval and practice of activist government fiscal policy around the world.

True

False

Assume that for a given year, the nominal interest rate is 9 percent while inflation rises to 11 percent indicating a 4 percent higher rate than anticipated. Which group of people is made better off by the inflation?

Those who borrow at variable interest rates

Those who save at variable interest rates

Those who borrow at fixed interest rates

Those who receive fixed incomes

Those who lend at fixed interest rates