If there is a leftward shift of the money demand curve, which of the following should the Fed do if it wants to keep the price level stable?
a. Lower its interest rate target
b. Sell bonds in the open market
c. Wait, since the price level does not usually change when the money demand curve shifts
d. Raise its interest rate target
e. Buy bonds in the open market
B
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In the early 1990s, economists became alarmed over the national debt because it
A. was larger than three months’ GDP. B. was growing faster than GDP. C. had reached twice the size of GDP. D. was growing faster than private debt.
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A. a voluntary dollar amount that people contribute towards Social Security. B. mandatory taxes partially paid out of workers' wages and salaries. C. entirely paid by your employer. D. collected only from people earning more than $120,000 a year.
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A. Good A B. Good B C. They are equally responsive. D. Not enough information is given.