If higher inflation ensues from a temporary negative supply shock, and in response, the central bank raises interest rates, then ________
A) it is likely adopting a policy to stabilize inflation in the short run
B) short-run inflation will fluctuate around (first go higher then go lower than) the long run level of inflation
C) it will need to lower interest rates back to their original values to ensure that inflation returns to its original rate
D) all of the above
E) none of the above
D
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The government of Lithasia ran a budget deficit of $60,000 in 2014. If the tax revenue of the Lithasian government in 2014 was $320,000,000, how much did the government spend in that year?
A) $319,940,000 B) $1,060,000 C) $320,060,000 D) $49,000,000
The demand for reserves is __________ related to the federal funds rate because banks __________ their excess reserves as the federal funds rate falls
A) inversely; increase B) inversely; decrease C) positively; increase D) positively; decrease
Mezzanine debt funds hold quite __________ assets issued by __________ companies
A) risky; small to midsized B) risky; large C) safe; small to midsized D) safe; large
Total surplus:
A. can never be zero.
B. can never fall below zero.
C. is always above zero.
D. is less than the consumer surplus.