Refer to Figure 26-1. In the figure, the money demand curve would move from Money demand1 to Money demand2 if
A) the interest rate increased. B) the price level decreased.
C) real GDP increased. D) the Federal Reserve sold Treasury securities.
C
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Is a depreciation of the dollar/euro exchange rate correlated with a decrease in the dollar return on U.S. deposits?
What will be an ideal response?
When real GDP is below natural real GDP, the unemployment rate is
A) rising. B) above the average unemployment rate. C) falling. D) below the average unemployment rate.
The Fed tends not to use discount policy as its principal tool in influencing the money supply since
A) discount loans do not affect the money supply. B) it does not have as much control over discount loans as it has on open market operations. C) it is prohibited from doing so by an act of Congress. D) it prefers to use reserve requirements.
The main problem with using the infant industries argument to justify protecting an industry from foreign competition is that
a. all industries will claim that they are infant industries in order to gain protection b. the protected industry will become too efficient and drive out foreign competition c. once in place, it is difficult to remove protection even as the industry matures d. it causes the goods that are produced in the protected industry to have lower prices e. this policy compromises national security if the infant industry produces military goods