1.The expected real rate of interest is the nominal interest rate plus the expected inflation rate. _________ (True/ False) 2. Countries with lower rates of money growth have _________ interest rates....

1.The expected real rate of interest is the nominal interest rate plus the expected inflation rate. _________ (True/ False)

2. Countries with lower rates of money growth have _________ interest rates.

3. If the growth rate of money increases from 5 to 7 percent, nominal interest rates will _________ in the long run.

4. A firm that expects higher profits from higher prices but does not recognize its costs are increasing is suffering from _________.

5. If actual inflation is higher than expected inflation, the actual unemployment rate will be _________ than the natural rate.

6. James Tobin explained business cycles with rational expectations. _________ (True/False)

7. The increase in the fraction of young people in the labor force that occurred when the baby-boom generation came of working age tended to _________ (raise/ lower) the natural rate of unemployment.

8. The original Phillips curve did not account for _________ inflation.