The main goals of monetary policy include all of the following EXCEPT
A) attaining the maximum sustainable growth of potential GDP.
B) keeping the unemployment rate close to the natural unemployment rate.
C) keeping the long term nominal interest rate equal to the real interest rate plus the inflation rate.
D) keeping the inflation rate low.
E) keeping the long-term interest rate at a moderate level.
C
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What is the largest source of tax revenue for the U.S. federal government and what is the largest expenditure item of the U.S. federal government?
What will be an ideal response?
In the above figure, the inflationary gap when AD2 is the aggregate demand curve equals
A) the difference between 110 and 100. B) the difference between $16.5 trillion and $16.0 trillion. C) LAS minus SAS at a price level of 100. D) AD1.
Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused
a. an increase in demand for housing and higher housing prices. b. an increase in demand for housing and lower housing prices. c. a reduction in demand for housing and higher housing prices. d. a reduction in demand for housing and lower housing prices.
As the dollar is devaluated
A. inflationary pressures are reduced and our standard of living is reduced. B. inflationary pressures are increased and our standard of living is increased. C. inflationary pressures are reduced and our standard of living is increased. D. inflationary pressures are increased and our standard of living is reduced.