If the Fed increases the quantity of money, in the short run the ________ and in the long run the ________
A) nominal interest rate falls; the price level falls
B) nominal interest rate falls; the price level rises
C) price level rises; the nominal interest rate falls
D) nominal interest rate rises; the price level falls
E) nominal interest rate rises; the price level rises
B
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The recognition lag is
A) the time it takes for policy makers to obtain data indicating what is happening in the economy. B) the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy. C) the time it takes to pass legislation to implement a particular policy. D) the time it takes for policy makers to change policy instruments once they have decided on the new policy. E) the time it takes for the policy actually to have an impact on the economy.
Suppose a perfectly competitive firm's marginal revenue is $10 and its marginal cost is $11. Under these circumstances the firm:
A. needs to know the market price before it can determine whether it is maximizing profit. B. is not maximizing profit and should increase output. C. is maximizing profit and should not change output. D. is not maximizing profit and should reduce output.
The price of one product in terms of another commodity is called its
A. money price. B. financial price. C. converse price. D. relative price.
An unhedged international investment has a speculative element to it, and is called a covered international investment.
Answer the following statement true (T) or false (F)