What is the impact on interest rates when the Federal Reserve decreases the money supply by selling bonds to the public?
What will be an ideal response?
Bond supply increases and the bond supply curve shifts to the right. The new equilibrium bond price is lower and thus interest rates will increase.
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The short-run Phillips curve will not shift unless there is
A) an increase in inflation that is unanticipated. B) a decrease in inflation that is unanticipated. C) a change in inflation expectations. D) an increase in the unemployment rate.
Which of the following will raise the expected marginal product of capital?
A) a reduction in the interest rate B) increased business optimism C) an investment tax credit D) a reduction in the corporate profits tax
The comparative advantage of the South was in
(a) small farms producing for the local market. (b) plantation agriculture producing for export. (c) manufacturing. (d) shipbuilding and trades related to shipbuilding.
Refer to the above figure. Excess quantity demanded will exist when
A) the price is between $0 and $6. B) the price equals $6. C) the price equals $10. D) quantity demanded equals 3.