If the Federal Reserve raises its target inflation rate, the monetary policy reaction function ________ and the aggregate demand curve ________.
A. shifts upward to the left; shifts to the right
B. shifts downward to the right; shifts to the left
C. shifts upward to the left; shifts to the left
D. shifts downward to the right; shifts to the right
Answer: D
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Last week, six Swedish kronor could purchase one U.S. dollar. This week, it takes eight Swedish kronor to purchase one U.S. dollar. This change in the value of the dollar will ________ exports from the United States to Sweden and ________ U.S
aggregate demand. A) increase; increase B) decrease; increase C) increase; decrease D) decrease; decrease
The sensitivity of bank capital to market interest rates is measured by
A) gap analysis. B) duration analysis. C) leverage ratio. D) capital analysis.
If a firm used a combination of inputs that was to the left of its isocost line, it would indicate that
A) it is exceeding its budget. B) it is not spending all of its budget. C) it is operating at its optimal point because it is saving money. D) None of the above
Rent controls are examples of which of the following?
a. price ceilings b. price floors c. equilibrium prices d. subsidies