The level of GDP, all else held constant, will tend to increase when ________.
A. reserve requirements are increased
B. there is an increase in the discount rate
C. the federal funds rate is increased
D. the Federal Reserve buys government securities in the open market
Answer: D
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Cross-price elasticity of demand is
A. negative for substitute goods. B. positive for general goods. C. negative for complementary goods. D. unitary for secondary goods.
Actual output can exceed the economy's potential both in the short run and the long run
a. True b. False Indicate whether the statement is true or false
Which of the following statements is true of comparative advantage?
a. A nation can have a comparative advantage in the production of a good only if it has an absolute advantage in its production. b. When a nation increases production in its area of comparative advantage and trades with another nation, both nations benefit. c. When a nation produces a good at a higher opportunity cost than its trading partner, it is said to have a comparative advantage. d. A nation imports the good in which it has a comparative advantage.
According to purchasing-power parity, if it took 1,100 Korean Won to buy a dollar this year, but it took 1,000 to buy it last year, then the dollar has
a. appreciated, indicating inflation was higher in the U.S. than in Korea. b. appreciated indicating inflation was lower in the U.S. than in Korea. c. depreciated indicating inflation was higher in the U.S. than in Korea. d. depreciated indicating inflation was lower in the U.S. than in Korea.