When the federal reserve sells bonds as a part of a contractionary monetary policy, there is:
A. A decrease in the money supply and a decrease in interest rate
B. A decrease in the money supply and an increase in interest rate
C. An increase in the money supply and a decrease in interest rate
B. A decrease in the money supply and an increase in interest rate
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The situation that exists because our unlimited wants exceed our limited resources is called ______.
a. a correlation b. an input c. a shortage d. scarcity
GDP is defined as the dollar value of __________ in a given year.
A. all of the inputs used in the economy B. the total output of the economy C. the total purchases made in the economy D. all intermediate and final goods produced in the economy
In periods of high inflation, real wages change even if nominal wages remain constant.
a. true b. false
Researchers have found that tax increases may have a small effect in the quantity purchased because
A) individuals might forget about the tax (salience). B) individuals are rational. C) individuals are credit constrained. D) individuals do not care about prices.