If the Fed responds to an increase in government spending with the goal of stable prices and output, which of the following would be the result?
a. A larger multiplier effect than normal
b. Partial crowding out
c. An increase in consumption and investment spending
d. No crowding out
e. Complete crowding out
E
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Holding all else constant, a rise in interest rates in the United States will cause the dollar to appreciate in international exchange markets
Indicate whether the statement is true or false
Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to rise and monetary base to remain the same. b. Demand for real goods and services to rise and M2 money supply to fall. c. Demand for real goods and services to remain the same and M2 money multiplier to remain the same. d. Demand for real goods and services to rise and M2 money supply to fall.
The phrase "sticky prices" refers to the prices of:
A. consumer goods not adjusting to the price level. B. more durable goods "sticking," and not adjusting to the price level. C. some output taking longer to adjust to the price level than the inputs used to create it. D. some inputs taking longer to adjust to the price level than the output it creates.
Briefly describe the two different types of junk bonds (high-yield bonds).
What will be an ideal response?