In response to an unanticipated easing of monetary policy, the price level ________ at first, then ________ after a year.
A. rises; returns most of the way to its original value
B. falls; returns most of the way to its original value
C. remains roughly unchanged; begins to rise
D. remains roughly unchanged; begins to fall
Answer: C
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________ can intervene directly in the foreign exchange market by buying or selling dollars
A) Congress B) The Fed C) The International Monetary Fund D) The U.S. Treasury department
Suppose that the money multiplier is 4. If the monetary base decreases by $2 million, the quantity of money will
A) increase by $8 million. B) increase by $500,000. C) decrease by $8 million. D) decrease by $500,000.
The country of Old Jersey produces milk and butter, and it has published the following macroeconomic data, where quantities are in gallons and prices are dollars per gallon. Between Year 1 and Year 2, nominal GDP grew by
A) 60.0%. B) 65.5%. C) 83.3%. D) 190.0%.
If pizza is measured on the horizontal axis and pretzels are measured on the vertical axis, the slope of the production possibility frontier at a given combination reflects
A) the total cost of producing that combination. B) the total cost of producing that quantity of pizza in terms of pretzels. C) the cost of making the last pizza in terms of pretzels. D) the cost of making the last pretzel in terms of pizza.