Financial markets pay close attention to changes in the federal funds rate because these changes:
A. indicate commercial bank lending policies.
B. directly affect the interest payments on the national debt.
C. directly affect a large volume of loans.
D. indicate the Fed's plans for monetary policy.
Answer: D
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As a result of a decline in interest rates and a rise in household income, the demand curve for housing has shifted to the right, but has retained the same slope. Consequently, the elasticity of demand for housing
A. has declined. B. has increased. C. has remained unchanged. D. cannot be compared.
Fiscal policy occurs when:
A. the government changes its plan for spending and taxing. B. the Federal Reserve makes changes to the federal budget. C. the government changes its plan for the money supply. D. the government raises or lowers nominal interest rates.
Continued economic growth is desirable if it means that the standard of living continues to increase.
Answer the following statement true (T) or false (F)
Define the following terms and explain their importance to the study of macroeconomics. a. Central bank b. Federal Open Market Committee c. Supply of money d. Monetary policy
What will be an ideal response?