When the economy is in a recession, the Fed can ________ the federal funds rate, which ________ aggregate demand and ________ real GDP
A) lower; increases; decreases
B) raise; decreases; increases
C) lower; increases; increases
D) raise; increases; decreases
E) lower; decreases; decreases
C
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As the price of an item goes up, the quantity demanded
A. rises. B. falls. C. remains the same.
The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,
a. U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP is unaffected. b. U.S. government purchases increase by $30,000; U.S. net exports are unaffected; and U.S. GDP increases by $30,000. c. U.S. government purchases, net exports, and GDP are unaffected. d. U.S. government purchases are unaffected; U.S. net exports decrease by $30,000; and U.S. GDP decreases by $30,000.
A limit on the amount of strawberries that can be imported into the United States is an example of
A) the rationing function of prices protecting domestic strawberry farmers. B) a price floor set by the government. C) a price ceiling set by government. D) an import quota.
Assuming no other changes, if checkable deposits increase by $40 billion and currency in circulation decreases by $40 billion, the:
A. M1 money supply will decline. B. M1 money supply will not change. C. M2 money supply will decline. D. M2 money supply will increase.