Suppose the economy is producing at the natural rate of output. An open market purchase of bonds by the Fed will cause ________ in real GDP in the long run and ________ in inflation in the long run, everything else held constant
A) an increase; an increase
B) a decrease; a decrease
C) no change; an increase
D) no change; a decrease
C
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The incentive to lend increases as the real rate of interest decreases
a. True b. False Indicate whether the statement is true or false
If the price of the dollar changes from 100 Japanese yen to 120 Japanese yen, the dollar has depreciated
a. True b. False Indicate whether the statement is true or false
The Fed pays banks interest on bank deposits held on reserve at the Fed
Indicate whether the statement is true or false
Which of the following statement(s) is (are) true?
A) If the income elasticity of demand for a product is negative, then the good is labeled an inferior good. B) If the income elasticity of demand for a product is greater than 1, then the good is labeled a necessity. C) If the cross-price elasticity of demand between two goods is negative, then the two good are complements. D) Both A and C