Answer the following questions true (T) or false (F)
1. In reality, the Fed is unable to use monetary policy to keep real GDP exactly at its potential level.
2. The Fed can use contractionary monetary policy in an attempt to keep inflation from increasing.
3. The Fed can use expansionary monetary policy to lower interest rates to stimulate aggregate demand.
1. TRUE
2. TRUE
3. TRUE
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Assuming that one dollar trades for 50 rupees, what is the dollar cost of 750 rupees?
A) $50 B) $75 C) $5 D) $15
The long-run equilibrium of a monopolistically competitive firm is characterized by
A) a tangency of the average total cost curve with the firm's demand curve. B) price equal to marginal cost. C) production at the minimum point of the firm's average total cost curve. D) production at the minimum point of the firm's average variable cost curve.
Central banks get the purchasing power to buy government securities by:
a. Making discount loans to banks. b. Taking loans from the government. c. Increasing their liabilities in the form of deposits from banks. d. All of the above. e. None of the above.
If all the assumptions underpinning the policy irrelevance proposition are in place, fully anticipated monetary policy will
A. not change either the level of real Gross Domestic Product (GDP) or the unemployment rate. B. affect the unemployment rate but have no impact on the level of real Gross Domestic Product (GDP). C. effectively alter both the rate of unemployment and the level of real Gross Domestic Product (GDP). D. have an impact on real Gross Domestic Product (GDP) but cannot alter the level of unemployment.