When the Fed unexpectedly increases the money supply,
a. real interest rates will tend to decline.
b. the exchange rate value of the dollar will tend to appreciate.
c. aggregate demand will tend to increase.
d. all of the above are correct.
e. both a and c are correct.
E
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If the output of a firm is increased by one unit, the revenue addition is called
A. total revenue. B. average revenue. C. marginal revenue. D. economic profit.
Why does perfect competition guarantee a Pareto optimal distribution of goods between two people? Under perfect competition,
A) everyone has the same preferences. B) everyone faces the same prices. C) everyone consumes the same quantity of both goods. D) goods are homogeneous.
A Pigovian tax imposed on consumers ___________ the price, and if the same tax were imposed on producers, it would _____________ the price.
A. increases; decrease B. decreases; increase C. increases; increase D. decreases; decrease
A permanent marginal tax decrease is likely to
A) shift the short-run aggregate supply curve to the left and the long-run aggregate supply curve to the right. B) shift both the short-run and the long-run aggregate supply curves to the left. C) shift the short-run aggregate supply curve to the right, and the long-run aggregate supply curve to the left. D) shift both the short run and the long run aggregate supply curves to the right.