Proponents of the interest-rate-based monetary policy transmission mechanism argue that when the Federal Reserve buys bonds, there will be
A) an increase in investment spending.
B) a decrease in the money supply.
C) a decrease in nominal Gross Domestic Product (GDP), but not in real income.
D) a decrease in the price of outstanding bonds.
A
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The figure above shows the loanable funds market. The equilibrium real interest rate is ________ percent, and the equilibrium quantity of loanable funds is ________
A) 4; $1.4 trillion B) 6; $1.6 trillion C) 4; $1.8 trillion D) 8; $1.8 trillion E) 8; $1.4 trillion
Educating girls helps
a. reduce fertility rates b. improve the health of children c. increase pressure on government to create jobs d. promote equal participation in development e. all of the above
The Ricardian model of international trade demonstrates that trade can be mutually beneficial. Why, then, do governments restrict imports of some goods?
A) Trade can have significant harmful effects on some segments of a country's economy. B) The Ricardian model is often incorrect in its prediction that trade can be mutually beneficial. C) Import restrictions are the result of trade wars between hostile countries. D) Imports are only restricted when foreign-made goods do not meet domestic standards of quality. E) Restrictions on imports can have significant beneficial effects on domestic consumers.
The economist Irving Fisher, after whom the Fisher effect is named, explained why interest rates ________ as the expected rate of inflation ________, everything else held constant
A) rise; increases B) rise; stabilizes C) fall; stabilizes D) fall; increases