Suppose individuals expect that interest rates will increase in the future. Also assume that the Fed wants to prevent any change in current output. Given this goal of the Fed, the Fed should implement a policy in the current period that
A) shifts the IS curve rightward.
B) shifts the IS curve leftward.
C) shifts the IS curve leftward and the LM curve upward.
D) shifts the LM curve upward.
E) shifts the LM curve downward.
E
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Which of the following is NOT a way in which power was divided up in the Federal Reserve System?
A) between bankers and business interests B) among states and regions C) between importers and exporters D) between government and the private sector
An increase in quantity demanded is caused by
A) an increase in income. B) a decrease in the price of the good. C) a decrease in the price of a complement. D) a change in expectations about price in the future.
Which statement is false?
A. Induced consumption is never negative. B. Autonomous consumption is constant. C. When C is positive, saving is negative. D. When consumption is smaller than disposable income, saving is positive.
Iceland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Lavaland can produce 24 units of food per year or 12 units of clothing. Which of the following is true?
A. Iceland has both a comparative and absolute advantage in producing food. B. Iceland has a comparative advantage, but not an absolute advantage in producing food. C. Lavaland has both a comparative and absolute advantage in producing clothing. D. None of the above are true.