Because the Fed can react to changes in the economy much more quickly than can Congress, time lags exist for fiscal policy but not for monetary policy.
Answer the following statement true (T) or false (F)
False
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If the Fed wishes to increase nominal interest rates, it must engage in an open market ________ of bonds that ________ the money supply.
A. sale; does not change B. sale; increases C. sale; decreases D. purchase; increases
An increase in foreign investment in Brazil's mining industry will increase the capital stock in Brazil. All else equal, as the capital stock increases, the marginal product of capital (MPK) will
A) increase due to diminishing marginal returns. B) decrease due to diminishing marginal returns. C) increase since capital is not subject to diminishing marginal returns. D) decrease since capital is not subject to diminishing marginal returns.
PPP-adjustment:
A. gives us a more realistic sense of differences in living standards around the world. B. allows us to see that poorer countries are not quite so poor as suggested by their nominal GDP per capita. C. gives us a realistic sense of how the living standards of the world's poorest citizens translate into dollar terms. D. All of these statements are true.
Which of the following is an example of someone with inflationary expectations taking a step designed to insulate themselves from the higher expected rates of inflation
What will be an ideal response?