The Fed fights inflation by _______
A. lowering the federal funds rate, which lowers interest rates and de-creases aggregate demand
B. raising the federal funds rate, which raises interest rates and decreases aggregate demand
C. decreasing the monetary base, which raises the interest rate and in-creases saving
D. lowering the long-term real interest rate, which increases investment and spurs economic growth
B By raising the federal funds rate, the Fed ultimately decreases aggregate demand, which slows the inflation rate.
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Describe how a sudden stop leads to a financial crisis
What will be an ideal response?
An industrial union is a union
a. organized on the basis of the workers' industry b. organized on the basis of workers' skills c. organized by an employer d. whose primary goal is to oppose technological advance and to protect the traditional method of working e. consisting of all workers in an industrial economy
Inflation
A) is a continuing decline in the general level of prices of goods and services. B) implies that the number of people unemployed has risen. C) reduces the purchasing power of the dollar. D) is an increase in the price of a single good or service.
The short-run aggregate supply curve (SRAS) is the amount of real GDP: ?
A. produced at various price levels. B. ?produced at various savings rate levels. C. purchased at various price levels. D. ?purchased at various saving rate levels.