Macroeconomics. True/False Questions. Please answer all questions and give brief explanation. The short-run nominal interest rate decreases and the long-run nominal interest rate increases when the central bank increases money supply.
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The short-run nominal interest rate decreases and the long-run nominal interest rate increases when the central bank increases money supply.
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The tax multiplier is larger than the government spending multiplier.
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According to the Pigou effect, a decrease in price leads to an increase in output.
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Under a small open economy model with floating exchange rates, an increase in money supply leads to an increase in investment and output.
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In theory, an increase in country risk premium leads to a decrease in investment and output.
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Under the closed economy model, if money
demand does not depend on the interest rate, the LM curve is vertical. -
The (negative) tradeoff between inflation and
unemployment holds only in the short run. -
According to the life cycle model, population aging (the fraction of the population that is elderly increases) leads to a decrease in national saving.
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According to Tobin’s q, a decrease in stock price leads to a decrease in investment and output.
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An increase in the real interest rate increases the inventory investment.
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