When the Fed worries about inflation, it ________ the federal funds rate and, in the short run, ________ the real interest rate
A) raises; raises
B) raises; lowers
C) lowers; lowers
D) does not change; the Fed raises
E) lowers; raises
A
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When money supply __________, the real rate of interest __________
A) increases; falls B) increases; rises C) decreases; rises D) increases; remains unchanged
Suppose a U.S. citizen invests $1,000 to purchase a one-year Japanese bond that has an interest yield of 10 percent. If the dollar appreciates 20 percent against the Japanese yen by the maturity date, the dollar value of the proceeds is _____
a. $900 b. $1,100 c. $1,300 d. $1,500 e. $1,200
Which of the following is an example of a service?
A) medical care B) dental care C) a psychology lecture D) a television set E) a, b and c
Which of the following is not a result of a higher federal budget deficit?
A) a higher real interest rate B) a depreciation of the currency C) a fall in exports D) a fall in the price of foreign inputs