Which of the following is likely to happen when the Fed raises the federal funds rate?
A) The long-run interest rate will fall. B) The labor demand curve shifts to the left.
C) The volume of economic activity will increase. D) The labor demand curve shifts to the right.
B
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List three reasons why nominal wages can be sticky in the short run
What will be an ideal response?
The policy lever most commonly used by the Fed is:
A. Changes in the discount rate. B. Buying and selling bonds. C. Changes in the reserve requirement. D. Foreign-exchange operations.
Refer to the provided supply and demand graph of Product X. What would happen if the government taxed the producers of this product because it has negative externalities in production?
What will be an ideal response?
When the price of tacos went from $2 to $3 dollars each, the quantity demanded of burritos changed from 100 to 120 a day. The cross-price elasticity of demand for burritos calculated using the initial value method is:
A. 1.33. B. 0.75. C. 0.4. D. -0.75.