Suppose the economy is in long-run and short-run equilibrium. The Fed changes its policy by raising the difference between the discount rate and the federal funds rate. In the long run we would expect to observe

A. a lower price level.
B. a higher real national income.
C. a higher price level.
D. a lower real national income.


Answer: A

Economics

You might also like to view...

Is child labor a problem in developing countries? Explain

What will be an ideal response?

Economics

The slope of a line

a. can only be calculated for straight lines b. varies at different points along a straight line c. indicates whether or not there is a causal relationship between variables d. is independent of the units of measurement used e. indicates how much the vertical variable changes for a given change in the horizontal variable

Economics

The video rental market can be described as a monopolistically competitive market. As a result of the economic profit earned by the first video rental outlets,

a. existing firms were able to successfully lobby the government for patent protection b. competitors were attracted to the industry, and their entry reduced economic profit c. demand dried up d. Blockbuster saw an opportunity to take over the industry e. competitors were discouraged from entering the industry

Economics

When leisure is a normal good, the income effect from a decrease in wages is evident in

a. a desire to consume more leisure. b. a desire to consume less leisure. c. an upward-sloping labor-supply curve. d. a shift in labor demand.

Economics