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please I didn't understand these multiple choice q Question 1 If the government appoints an inflation-hating central banker, in the long term inflation will fall
please I didn't understand these multiple choice q
Question 1
If the government appoints an inflation-hating central banker, in the long term
- inflation will fall and unemployment will rise.
- inflation will fall and nominal interest rates will fall.
- inflation will fall and nominal interest rates will rise.
- inflation will remain unchanged but unemployment will rise.
- None of the above.
Question 2
In an economy where most agents have lagged expectations about the inflation rate,
- people will always forecast the inflation rate perfectly accurately.
- people will make systematic forecasting errors if the inflation rate is increasing.
- people will not always forecast accurately, but they will not make systematic mistakes.
- the inflation rate will be much lower than if they have rational expectations.
- unemployment will normally be low.
Question 3
Suppose in the AS-AD model the economy starts at the full employment level of output. In the short term, a decrease in taxes will cause
- an increase in inflation and an increase in employment.
- an increase in inflation and no change in employment.
- a decrease in inflation and a decrease in employment.
- no change in inflation and no change in employment.
- no change in inflation and an increase in employment.
Question 4
Suppose in the AS-AD model the economy starts at the full employment level of output. In the long term, a decrease in taxes will cause
- an increase in inflation and an increase in employment.
- an increase in inflation and no change in employment.
- a decrease in inflation and a decrease in employment.
- no change in inflation and no change in employment.
- no change in inflation and an increase in employment.
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