When the Federal Reserve wishes to, in the short run, decrease inflation, it
A. will increase the money supply by buying bonds.
B. will decrease the money supply by selling bonds.
C. will increase the money supply by selling bonds.
D. has no policy options that will accomplish this.
Answer: B
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
An increase in price will decrease demand.
Answer the following statement true (T) or false (F)
Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe producing one sandwich is
A) 2 pizzas. B) 1/2 pizza. C) 5 pizzas. D) 1 pizza.
A group of buyers and sellers of a particular good or service is called a(n)
a. coalition.
b. economy.
c. market.
d. competition.