In order to change the money supply, the Fed might use which of the following tools?
A. Dual mandate
B. Reserve requirement
C. Deficit spending
D. Fiscal policy
Answer: B
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An open economy produces most of the goods and services that it needs, with few imports and exports.
Answer the following statement true (T) or false (F)
An increase in the price level shifts the planned expenditures curve upward
Indicate whether the statement is true or false
For a given set of prices, two consumers choose bundles that are off the contract curve. In a competitive market,
A) prices will adjust until the consumers choose bundles that are on the contract curve. B) the indifference curves will shift back to the contract curve. C) the contract curve will shift to connect these bundles. D) no adjustments need to be made.
If the price of gasoline has increased from $3 per gallon to $4 per gallon at the same time that the overall price index increased from 200 to 266.66, then you know that the inflation adjusted price of gasoline has
A. remained constant. B. increased. C. decreased.