When the FOMC raises the federal funds rate, almost immediately ________ and a few weeks later the ________
A) short-term interest rates rise; quantity of money and supply of loanable funds decrease
B) long-term interest rates rise; quantity of money and supply of loanable funds decrease
C) short-term interest rates fall; quantity of money and supply of loanable funds decrease
D) long-term interest rates rise; quantity of money and supply of loanable funds increase
E) short-term interest rates fall; quantity of money and supply of loanable funds increase
A
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The velocity of circulation grows at 1 percent and real GDP grows at 3 percent. If the quantity of money grows at 2 percent, the inflation rate is
A) 8 percent. B) 10 percent. C) zero. D) 2 percent. E) 4 percent.
Suppose that a series of decisions by banks effectively raises e. The resulting ________ in the money supply could be offset by the Fed with a "defensive" open market ________ of government securities
A) rise, purchase B) rise, sale C) fall, purchase D) fall, sale
For both parties to gain from trade, the price at which they trade must lie between the two opportunity costs
a. True b. False Indicate whether the statement is true or false
Which of the following is true?
A) Even when they are economically free, high-income countries have been unable to achieve high growth rates. B) Even when low-income countries adopt institutions and policies supportive of economic freedom, they are unable to achieve high growth rates. C) When low-income countries adopt institutions and policies supportive of economic freedom, they are able to achieve high growth rates. D) Even when they are economically free, low-income countries have been unable to achieve high growth rates.