Employing Figure 4-2 above, the money market is initially in equilibrium at point G and after the economy moves to equilibrium, the Federal Reserve increases the money supply by 500. We would observe
A) the interest rate first rises to 7.5% and Y to 3500.
B) the interest rate first rises to 7.5% then falls to 5%.
C) Y rises to 4000 as interest rates remain stable.
D) the economy moves from point G to C, to F then D.
B
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A monopsony is a term used to refer to a firm that is the sole seller of a good or service
Indicate whether the statement is true or false
If the consumer price index (CPI) this year is 162 and last year it was 170, the inflation rate a. is positive
b. is negative. c. has decreased since last year. d. has increased since last year. e. is the same as last year.
Given an initial allocation of resources that is off the consumption contract curve, in a perfect market environment without externalities and imperfect information,
A. one can end up at only one spot on the contract curve. B. both indifference curves could move to a higher level of utility. C. one can end up at any point on the contract curve. D. only one of the indifference curves could move to a higher level of utility.
The effect that a gift given to a U.S. citizen from a foreign resident will have on the balance of payments is to
A. have no effect on the balance of payments if the gift was made by a foreign country. B. have no effect on the balance of payments if the gift was made in the U.S. C. decrease the balance of payments. D. increase the current account balance.