According to the traditional interest-rate channel, expansionary monetary policy lowers the real interest rate, thereby raising expenditure on
A) business fixed investment.
B) government expenditure.
C) consumer nondurables.
D) net exports.
A
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Suppose the consumer's indifference curves are concave (i.e., bowed away from the origin) instead of convex. In this situation,
a. along an indifference curve, the marginal value of X is falling as more X and less Y is consumed. b. all baskets on the budget line give the consumer the same level of satisfaction. c. the marginal value of X must equal PX/PY at the consumer's optimum. d. the consumer's optimum is always a corner solution.
Publishers practice price discrimination when they sell books at high prices to
A) early adopters. B) online book sellers. C) large chain bookstores. D) local bookstores.
Comparing the core inflation rate to the Consumer Price Index, the core inflation rate
A) controls for the biases of the CPI. B) uses current period quantities, not base period quantities. C) measures all goods produced, not just consumer goods. D) includes volatile elements not in the CPI. E) excludes the volatile elements of the CPI.
Financial instruments used primarily to transfer risk would include all of the following, except:
A. an insurance contract. B. options. C. a futures contract. D. a bank loan.