Suppose most people had anticipated that inflation would be 3% in the coming year because the Fed would increase the money supply by 3%. Instead, the Fed increases the money supply by 5%
In the short run, this would cause actual output to be ________ full-employment output and prices to increase by ________ 3%. A) above; more than
B) above; less than
C) below; more than
D) below; less than
A
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In the foreign exchange market, when the U.S. interest rate rises, the supply of dollars ________ and the foreign exchange rate ________
A) increases; does not change B) decreases; rises C) increases; falls D) increases; rises E) decreases; falls
Suppose we were analyzing the pound per Swiss franc foreign exchange market. If there is the expectation that the Swiss franc will rise in value in the near future, then in the spot market:
a. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market falls, causing an uncertain change in the value of the Swiss franc. b. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market rises, causing an appreciation of the Swiss franc. c. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market rises, causing an uncertain change in the value of the Swiss franc. d. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing a depreciation of the Swiss franc. e. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.
A commonly-used gauge of poverty is the
a. income inequality rate. b. average income rate. c. poverty rate. d. social inequality rate.
Individuals, firms, and government agencies deplete clean water and clean air because
A. they are excludable resources. B. the cost of doing so has no impact on the environment. C. they are nondepletable. D. there is little to no charge in accessing these resources.