If you assume that the equation of exchange is a dependable economic model, then the Fed can control
a. real GDP.
b. aggregate supply.
c. nominal GDP.
d. economic growth.
c
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To the extent that households are target savers who save to reach a specific goal, an increase in the interest rate ________ household saving and a decrease in the interest rate ________ household saving.
A. decreases; increases B. increases; decreases C. increases; does not affect D. does not affect; increases
If the Fed announces a new policy of slower monetary growth it will result in lower inflation and no change in output only if
A) the policy is credible and price expectations are reduced. B) the policy is time consistent and expectations remain constant. C) the policy is time inconsistent and expectations increase. D) Both A and B are correct.
Refer to Figure 9.1. What is the maximum profit that can be achieved?
A. $250
B. $500
C. $750
D. $850
The national debt includes ______.
a. the debt of state governments b. projected Social Security costs c. the value of all outstanding bonds d. debt the government owes itself