If monetary policymakers do not want an increase in government purchases, which increases aggregate demand, to cause an increase in inflation, they would:
A. increase the growth rate of money.
B. shift the monetary policy reaction curve to the right, raising inflation at every real interest rate.
C. do nothing and let the economy's self-correcting mechanism work.
D. shift the monetary policy reaction function left, increasing the real interest rate at every rate of inflation.
Answer: D
You might also like to view...
About 6% of annual total federal government expenditures goes toward paying interest on the federal debt
Indicate whether the statement is true or false
In an oligopoly, firms can increase their market power by
A) undertaking heavy advertising expenditure. B) colluding to set prices. C) selling to buyers who have market power. D) pursuing dominant strategies.
Given the economy's existing resources and technology, the only way to enjoy more consumer goods today is to
a. devote more resources to investment goods today. b. accumulate more capital today. c. have a slower economic growth rate in the future. d. devote more resources to consumer goods in the future.
If, with one unit of labor, the U.S. can produce 20 units of computer software and 10 units of computer hardware, and China can produce 6 units of software and 6 units of hardware, then trade can make
A. both better off. B. the U.S. better off but not China. C. neither better off. D. China better off but not the U.S.