In the period of 1979 to 1982, if the Fed had set an interest rate target that was equal to the actual market interest rates that occurred, the:
A. target would have been a federal funds rate of zero percent.
B. economy would have been better off.
C. target would not have been politically acceptable.
D. inflation rate would have risen further.
Answer: C
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Voluntary exchange
A. is usually beneficial to one party, but not the other. B. is always beneficial to both parties. C. is occasionally beneficial to both parties. D. occurs only between nations, not between individuals.
If saving equals $200 when real disposable income equals $1,000, the break-even income is
A) less than $1,000. B) greater than $1,000. C) equal to $1,000. D) equal to $1,200.
The primary reason that money is demanded is for: a. transaction purposes
b. asset purposes. c. precautionary reasons. d. investment purposes.
In the diagram, the elimination of discrimination is best represented by:
A. a move from C to E.
B. an inward shift of the production possibilities curve.
C. a move from A to D.
D. a move from E to C.