The goals of monetary policy tend to be interrelated. For example, when the Fed pursues the goal of ________, it also can achieve the goal of ________ simultaneously
A) economic growth; a low current account deficit
B) high employment; lowering government spending
C) stability of financial markets; a low current account deficit
D) high employment; economic growth
D
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The law of demand is illustrated by a demand curve that is
a. horizontal b. vertical c. upward sloping d. constant e. downward sloping
Firms with market power offer a differentiated product in order to
a. follow the trends b. increase market power c. support its contractors in low-wage countries d. fill up costly warehouses e. All of the answers are correct.
Residential construction in the form of homes and apartment buildings are classified as consumption goods
Indicate whether the statement is true or false
Other things equal, which of the following is true?
a. A reduction in prices will increase the real wealth of those holding a fixed quantity of money. b. A reduction in prices will lead to a decline in net exports. c. A reduction in prices will increase the scarcity of money, raise the real interest rate, and, thereby, encourage investment and consumption. d. A reduction in prices will increase profit margins and, thereby, stimulate additional investment.