If the Federal Reserve's goal is to stabilize aggregate demand, then it will _____ the money supply in response to a stock market boom. This causes interest rates to _____
Fill in the blank(s) with correct word
decrease, rise
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Answer the following statement(s) true (T) or false (F)
1. If the price of a good changes, the demand for the good changes. 2. When the quantity demanded by consumers goes up, we can be sure that there has been a rise in demand 3. A demand curve is drawn downward sloping to show that price and quantity demanded will move in opposite directions as long as other relevant factors remain unchanged. 4. An increase in the price of compact discs would shift the demand curve for DVD players to the left. 5. An increase in the price of gasoline would shift the demand curve for gasoline to the left.
Assume that Honduras has a comparative advantage in producing bananas and exports bananas to Brazil. We can conclude that
A) Honduras has a lower opportunity cost of producing bananas relative to Brazil. B) Brazil has an absolute disadvantage in producing bananas relative to Honduras. C) Labor costs are higher for banana producers in Brazil than in Honduras. D) Honduras also has an absolute advantage in producing bananas relative to Brazil.
The optimal time for the implementation of contractionary fiscal policy would be
A. before inflation accelerated. B. after inflation accelerated. C. after unemployment increased. D. after the price level had risen significantly.
The stock market crashed in the year __________.
Fill in the blank(s) with the appropriate word(s).