Which of the following variables is likely to serve as an intermediate target for monetary policy?
A) Money supply
B) Inflation rate
C) Open-market operations
D) Unemployment rate
A
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When actual output is less than potential output, there is ________ output gap and the rate of inflation will tend to ________.
A. an expansionary; increase B. a recessionary; increase C. an expansionary; decrease D. a recessionary; decrease
If an industry is characterized by economies of scale:
A) barriers to entry are usually not very large. B) long-run average costs of production increase as the quantity the firm produces increases. C) capital requirements are small due to the efficiency of the large-scale operations. D) the costs of entry into the market are likely to be substantial.
If people suddenly anticipate that inflation will rise during the next year, which of the following is most likely?
a. Nominal interest rates will rise. b. Nominal interest rates will decline. c. The demand for goods and services will decline. d. Both the real and nominal interest rates will decline.
When the general price level in our economy increases, the following effects occur except:
A. The purchasing power of people's savings will increase B. The interest rate will also tend to increase C. Foreign buyers will buy less of our output, and we tend to import more D. Our net exports will tend to decrease