When the Fed increases the money supply
A) the interest rate rises and this stimulates consumption spending.
B) the interest rate falls and this stimulates investment spending.
C) the interest rate rises and this stimulates investment spending.
D) people spend less because they have more money.
B
You might also like to view...
According to the text, the actual M2 multiplier in the United States today is
A) about 5. B) between 1.0 and 2.0. C) negative. D) over 10.
The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a:
a. rightward shift of the aggregate demand curve. b. leftward shift of the aggregate demand curve. c. rightward shift of the aggregate supply curve. d. leftward shift of the aggregate supply curve.
In January the price of widgets was $1.00, and Wendy's Widgets produced 80 widgets. In February the price of widgets was $1.50, and Wendy's Widgets produced 110 widgets. In March the price of widgets was $2.00, and Wendy's Widgets produced 140 widgets. The price elasticity of supply of Wendy's Widgets was about
a. 0.79 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00. b. 1.27 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00. c. 0.79 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00. d. 1.27 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00.
The cash price at your local elevator is $3.60/bu for corn. The relevant (nearby) futures contract for corn is the December contract and it is valued today at $3.50/bu. The "basis" for this location (market) is:
a. $0.50/bu b. -$0.50/bu c. $0.10/bu d. -$0.10/bu