Macroeconomics

When The Central Bank Controls The Interest Rate A Rise In The Price Target Will In The Short Run

Question

When the central bank controls the interest rate, a rise in the price target will, in the short run,

cause:

Select one:

a. an increase in the nominal wage.

b. the wage setting curve to shift downward.

c. the AD curve to shift leftward.

d. the price setting curve to shift down.

e. the wage setting curve to shift upward.

A comparison of the average growth rates for the periods 1970-2006 and 1996-2006 for Australia indicates that:

Select one:

a. the recent increase in average growth rates is due to large increases in capital formation.

b. the average growth rate has increased in the more recent period.

c. the recent increase in average growth rates is due to the fact that Australia is a lucky country.

d. the average growth rates are basically the same.

e. the average growth rates have decreased.

Assume that the economy is initially operating at the natural level of output. An increase in the minimum wage will cause:

Select one:

a. an increase in the real wage in the medium run.

b. a reduction in the real wage in the medium run.

c. no change in the nominal wage in the medium run.

d. ambiguous effects on the real wage in the medium run.

e. no change in the real wage in the medium run.

Macroeconomics

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