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Homework answers / question archive / For each of the following questions, state whether the statement is true or false

For each of the following questions, state whether the statement is true or false

Economics

For each of the following questions, state whether the statement is true or false. (Hint: Look at ALL THE WORDING in the sentence, some words change the correctness of the statement).

According to the Purchasing Power Parity (PPP) theory of nominal exchange rates, countries with relatively high rates of inflation will see their nominal exchange rates depreciate over time.

True or False

A central goal of Federal Reserve policy is to drive inflation to 0%, because such a policy entails numerous benefits and no costs for the U.S. economy.

True or False

In the Keynesian model, whenever planned aggregate expenditure (PAE) is greater than current output (Y), there is a recessionary gap, and the short-run equilibrium can only be restored through fiscal policy.

True or False

Monetary policy can be autonomous under fixed exchange rate regimes.

True or False

When government deficits decline, and there is less need to sell government bonds as a result, the economy would generally experience less crowding out of private investment.

True or False

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