If economic data reveals that inflation is rising, the Fed:
A. does not need to know the state of real GDP growth in order to justify increasing the growth rate of the money supply.
B. may increase the growth rate of the money supply without really knowing the state of real GDP growth.
C. may reduce the growth rate of the money supply without really knowing the state of real GDP growth.
D. will also at that time know the state of real GDP growth and can respond accordingly.
Ans: C. may reduce the growth rate of the money supply without really knowing the state of real GDP growth.
You might also like to view...
Suppose the marginal propensity to consume is 0.8. A $20 billion increase in government spending shifts the IS curve
A) to the right by $100 billion. B) to the left by $20 billion. C) to the left by $16 billion. D) to the right by $2.5 billion.
Refer to the scenario above. Suppose you decide to buy a Toyota Corolla. You value the car for $10,000. You don't know it, but the car dealer values it for $8,500. Which of the following is true in this case?
A) There are no gains from trade. B) There are gains from trade. C) There are negative economies of scale. D) There are positive economies of scale.
A sole proprietorship is limited to how many owners?
A) 1 B) 2 C) 10 D) There is no limit to the number of owners.
Describe the profit-maximizing firm's decision about how much to spend on innovation