In the short run, when the Fed increases the nominal interest rate, the real interest rate
A) permanently falls.
B) does not change.
C) permanently rises.
D) temporarily rises.
E) temporarily falls.
D
You might also like to view...
All of the following are strategies a firm with market power can adopt to increase it profits over time except:
A) mergers with, and acquisitions of, competing firms. B) erecting barriers to entry. C) setting price equal to the marginal costs of production. D) influencing the regulatory process.
Businesses in the United States cut their investment projects by $30 billion. If the MPC is 2, what will be the impact on the national income (Y)?
A. Y will fall by $15 billion. B. Y will fall by $30 billion. C. Y will fall by $60 billion. D. Y will fall by $120 billion.
Which group of policies aims at extracting all consumer surplus?
A. Price matching and randomized pricing. B. Price discrimination and peak load pricing. C. two-part pricing and block pricing. D. Cross-subsidization and brand loyalty.
One would expect people who work the night shift to have higher wages than their day-shift counterparts.
Answer the following statement true (T) or false (F)