If the Fed's monetary policy reaction function does not change, then when inflation increases the Fed responds by ________ the real interest rate, which ________ consumption and investment spending, which ________ output.
A. increasing; increases; decreases
B. decreasing; decreases; decreases
C. increasing; decreases; decreases
D. increasing; increases; increases
Answer: C
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In the above figure, the equilibrium price of a paperback book is $6 per book and the equilibrium quantity is 3 million books. The National Literature Board convinces the government to impose a price ceiling of $3 per book
At this price, the quantity of books supplied to the market will be A) 3 million a month and will equal the quantity demanded. B) less than 3 million a month and will exceed the quantity demanded. C) less than 3 million a month and will be less than the quantity demanded. D) more than 3 million a month and will exceed the quantity demanded.
Mortgage insurance protects lenders when a borrower defaults by making up any shortfall needed to repay the loan if the sale of the property doesn't cover the debt Federally regulated lenders must have mortgage insurance on loans where the buyer's down payment is less than 20 per cent of the price. In this example, what signal do potential homeowners give to indicate they are low-risk?
A) indicating high income B) buying an expensive home C) having a large down payment D) buying an inexpensive home
U.S. banks have most of their branches in
A) Latin America, the Far East, the Caribbean, and London. B) Latin America, the Middle East, the Caribbean, and London. C) Mexico, the Middle East, the Caribbean, and London. D) South America, the Middle East, the Caribbean, and Canada.
Engel's Law, relating to the demand for food,
a. states that food demand is inelastic b. holds more strongly in developed countries c. indicates why the food sector experiences more than proportionate increases in quantities demanded as incomes rise d. shows why food demand expands as citizen education improves e. was only relevant when established in the 1800s