Determine whether following statements are true or false. Right answer is worth

Question

Determine whether following statements are true or false. Right answer is worth 0.5 points and wrong answer costs 0.5 points. The total points cannot be negative however. There is a single right answer to each item. I. According to Fisher equation there is an approximate relation r = R between nominal interest rate R, real interest rate r and inflation ate i 2. Ricardian equivalence does not hold if there is proportional taxation of labor income 3. Productivity growth does not affect growth of the economy in the Solow mode 4. Inflation mean growth rate of price level 5. In Keynesian macroeconomic models monetary policy does not affect the real economy at all 6. Keynesian macroeconomic models usually include some price rigidities in the short run.

Explanation / Answer

1. TRUE

2.FALSE,

3. FALSE, PRODUCTIVITY GROWTH HAS A POSITIVE EFFECT ON GOWTH IN THE ECONOMY.

4. TRUE

5. FALSE, IN CLASICAL MACROECONOMICS THE MONETARY POLICY IS INEFFECTIVE.

6. TRUE.

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