If the Fed orders a contractionary monetary policy, describe what will happen to the following variables relative to what would have happened without the policy:
a. The money supply
b. Interest rates
c. Investment
d. Consumption
e. Net Exports
f. The aggregate demand curve
g. Real GDP
h. The price level
a. The money supply decreases
b. Interest rates rise
c. Investment decreases
d. Consumption decreases
e. Net exports decrease
f. The aggregate demand curve shifts to the left
g. Real GDP falls
h. The price level falls
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The exchange rate regime that is best for most nations
A) is unclear. B) is fixed exchange rates. C) is floating exchange rates. D) is a mixture of fixed and floating regimes.
If you fit a line through a scatter diagram of points that represent coordinates of consumer spending and disposable income, the slope of this line will equal the
a. propensity to consume b. variable propensity to consume. c. marginal propensity to consume. d. average propensity to consume.
Fluctuations in real GDP are caused only by changes in aggregate demand and not by changes in aggregate supply
a. True b. False Indicate whether the statement is true or false
The production-possibility curve illustrates the consumption preferences of a country's population, and explains why all people prefer to be employed rather than unemployed.
Answer the following statement true (T) or false (F)