Refer to Table 26-1. The hypothetical information in the table shows what the values for real GDP and the price level will be in 2017 if the Fed does not use monetary policy
Which of the following policies makes sense if the Fed wants to keep real GDP at its potential level in 2017?
A) The Fed should lower the target for the federal funds rate.
B) The Fed should pursue contractionary policy.
C) The trading desk should sell Treasury securities.
D) The Fed should lower capital gains taxes.
A
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Suppose there are two economies, Alpha and Beta, that have the same production possibilities frontiers. If Beta devotes more resources to produce capital goods than consumer goods as compared to Alpha, then in the future
A. Beta will experience greater economic growth than Alpha. B. Alpha will not be able to achieve full employment or productive efficiency. C. Alpha will experience greater economic growth than Beta. D. Beta will not be able to achieve full employment or productive efficiency.
Assume a firm is currently producing 100 units of output, total fixed costs are $10,000, and average variable costs are $8. Based on this information we can conclude, with certainty, that the firm's:
A) marginal costs are $8. B) total variable costs are $8000. C) average fixed costs are $2. D) total costs are $10,800.
Assume that when $100 of new reserves enter the banking system, the money supply ultimately increases by $625 . Assume also that no banks hold excess reserves and that the entire money supply consists of bank deposits. If, at a point in time, reserves for all banks amount to $500, then at that same point in time, loans for all banks amount to $2,625
a. True b. False Indicate whether the statement is true or false
The demand curve for the product of a monopolistic competitor
A. is horizontal. B. is vertical. C. is the same as the market demand curve. D. slopes downward.