According to the political business cycle theory, if the Fed wanted to see a President re-elected, prior to the election it might
a. lower the discount rate and sell bonds.
b. lower the discount rate and buy bonds.
c. raise the discount rate and sell bonds.
d. raise the discount rate and buy bonds.
b
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Studies on consumer behavior have found that most people value fairness enough that they will refuse to participate in transactions they consider unfair, even if they are worse off as a result
How does this affect a firm's decision to raise prices in the event of a temporary increase in demand?
________ in the expected future domestic exchange rate causes the demand for domestic assets to increase and the domestic currency to ________, everything else held constant
A) An increase; appreciate B) An increase; depreciate C) A decrease; appreciate D) A decrease; depreciate
The original intent of the Federal Reserve Act of 1913 was to provide the Fed with what role?
A) regulator of the banking system B) lender of last resort C) manage the exchange rate D) maintain a balanced budget
Mathematically, price elasticity of demand is the percentage change in the:
A. quantity demanded of a good in response to a given percentage change in the price of the good. B. price of a good that is demanded in response to a given percentage change in quantity. C. quantity of a good that is supplied in response to a given percentage change in price. D. price of a good that is supplied in response to a given percentage change in quantity.