When there is a great deal of inflation the Fed will
A. sell securities on the open market.
B. buy securities on the open market.
C. both sell and buy securities on the open market.
D. not sell nor buy securities on the open market.
A. sell securities on the open market.
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
The manner in which a nation's economy reacts when the measured factors are changed affects almost every individual
Indicate whether the statement is true or false
If sellers expect the price of a good to rise in the future, what are they likely to do?
(A) Put more goods on the market immediately. (B) Store goods now to sell more in the future. (C) Raise their prices now. (D) Set prices according to the law of demand.
The U.S. central bank is a financial institution that:
A. has the sole right to accept deposits and make loans. B. sets borrowing and lending in a country. C. has the sole right to issue currency. D. determines what assets will back a currency.