The aggregate demand curve shifts to the left when the Fed:
A. increases its target inflation rate, reflected by a downward shift in the Fed's policy reaction function.
B. decreases its target inflation rate, reflected by an upward shift in the Fed's policy reaction function.
C. decreases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function.
D. increases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function.
Answer: B
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When interest rates are lower, consumers and companies are able to borrow money cheaply in order to make major purchases. As a result, the demand for goods in an economy will generally
A) remain the same. B) increase. C) decrease. D) be minimally affected.
In 2012, the European Central Bank bought the debt of which nation?
A) the United States B) France C) Spain D) Germany
One thing that has reduced the U.S. rate of inflation since 1945 has been
A. recessions. B. wars. C. large federal budget deficits. D. rapid growth in the money supply.
In the graph shown above at a price of $4.50
A. there is a shortage.
B. there is a surplus.
C. there is a both a shortage and a surplus.
D. there is neither a shortage nor a surplus.