Suppose the Federal Reserve announces that it will be making a change to a key interest rate to increase the money supply. This is likely because
a. the Federal Reserve is worried about inflation.
b. the Federal Reserve is worried about unemployment.
c. the Federal Reserve is hoping to reduce the demand for goods and services.
d. the Federal Reserve is worried that the economy is growing too quickly.
b
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Adverse selection is created by
A) incentives to change behavior after two parties have reached an agreement. B) risk. C) lump-sum taxes. D) private information.
Real GDP values current output of goods and services at their current prices.
Answer the following statement true (T) or false (F)
A second-price auction
a. is also called a Vickrey auction b. is where bidders submit increasing bids until all but one remains c. is where the sole remaining bidder wins and pays his winning bid d. all of the above
The idea of menu costs suggests that
a. firms alter prices less frequently as inflation increases. b. firms alter prices more frequently as inflation increases. c. firms always alter prices when costs increase. d. firms alter prices as interest rates rise.