Question

3. Which of the following believe that there is no Phillips curve trade-off either in the...

3. Which of the following believe that there is no Phillips curve trade-off either in the short run nor in the long run?

A. Keynesians

B. Rational Expectations school

C. Monetarists

D. Supply-siders

6. Which of the following would be the most optimistic with regard to the ability of the government to reduce unemployment by monetary or fiscal policy?

A. Monetarists

B. Keynesians

C. Rational Expectations School

D. Supply-siders

8. Which of the following would decrease a country’s exports?

A. a decrease in the exchange rate (i.e. a decrease in the price of foreign exchange)

B. an increase in the domestic rate of interest

C. a decrease in domestic prices

D. an increase in domestic income

E. none of the above

14. Which of the following would result if a country's currency appreciated?

A. an increase in both imports and exports

B. a decrease in both imports and exports

C. an increase in imports and a decrease in exports

D. a decrease in imports and an increase in exports

E. an increase in the rate of interest

15. Under what conditions would diversification NOT reduce risk?

A. if the correlation between securities equals zero

B. if the correlation between securities is positive

C. if the correlation between securities is negative

D. if the correlation between securities equals positive one

E. diversification always reduces risk

Homework Answers

Answer #1

3. Which of the following believe that there is no Phillips curve trade-off either in the short run nor in the long run?

B. Rational Expectations school

According to them, the Philip's curve is vertical in the short run a well.

6. Which of the following would be the most optimistic with regard to the ability of the government to reduce unemployment by monetary or fiscal policy?

B. Keynesians

Keynes advocated government intervention to stablize the economy.

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