In the figure above, in the long run what happens if the Fed increases the quantity of money by 5 percent?
A) The value of money rises by 5 percent.
B) The nominal interest rate rises by 5 percent.
C) The price level rises by 5 percent and the LRMD shifts leftward.
D) The value of money falls by 5 percent and there will be a movement down along the LRMD curve.
E) The real interest rate falls and the LRMD curve shifts rightward.
D
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The Federal Reserve can:
A. only set a money supply target that is consistent with a nominal interest rate target, and vice versa. B. only target the nominal interest rate, not the money supply. C. simultaneously set independent money supply and nominal interest rate targets. D. only target the money supply, not the nominal interest rate.
If a firm competing in a price-taker market seeks to maximize profit, the firm should
a. increase output whenever marginal cost is less than average total cost. b. increase output whenever marginal revenue is less than marginal cost. c. choose the output where per-unit profit is greatest. d. increase output whenever price exceeds marginal cost.
Which European nation has kept its own currency and maintains a fixed value against the euro?
a. The United Kingdom b. Belgium c. Denmark d. Russia
Negotiations between the management of a company and the management of a union for the purpose of setting a mutually agreeable contract on wages, fringe benefits and working conditions for all employees in a union is know as
A. an industrial union. B. a closed shop. C. a union shop. D. collective bargaining.