When the Fed ________ the federal funds rate, the opportunity cost of firms' investment ________ and so the quantity of investment ________
A) increases; falls; increases
B) decreases; falls; decreases
C) increases; rises; decreases
D) decreases; rises; decreases
E) increases; rises; increases
C
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Both the nominal rate of interest and the real return on investment increase with the inflation rate
Indicate whether the statement is true or false
Until the creation of the Marine Hospital Service in 1918, the primary role of the federal government in health care was to quarantine ships and control ports to prevent epidemics
a. True b. False
For each of the following statements, state whether the statement is true, false, or uncertain and explain why
i. A risk neutral person is indifferent to a gamble and the expected value of the gamble. ii. A risk-averse person will never accept a gamble. iii. A risk-loving person will accept any gamble.
Which of the following is a problem with using real GDP as a measure of economic well-being? a. It does not account for inflation
b. It does not account for production within the household. c. It does not account for production by foreign firms producing inside the U.S. d. all of the above