As global financial markets become more intertwined, the Fed has
A. more control over fiscal policy.
B. less control over fiscal policy.
C. less control over monetary policy.
D. more control over monetary policy.
Answer: C
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Economic reasoning is based on the premise that: a. all decisions or actions are costless
b. only non-economic decisions or actions have a cost associated with them. c. only economic decisions or actions have a cost associated with them. d. all decisions and actions have a cost associated with them.
Assume that the interest rate on a federally insured deposit declines from 15 percent per annum to 10 percent. If an individual holding a U.S. Treasury bill worth $2,500 plans to sell it after this drop in interest rate, he would realize (approximately) a:
a. capital gain worth $99. b. capital loss worth $100. c. capital gain worth $100. d. capital loss worth $99.
The modern monetarists believe that
A. V is very unstable. B. V never changes. C. Any changes in V are either very small or predictable. D. If M rises, V will fall by the same percentage.
In the short run, the following could cause a recessionary gap
What will be an ideal response?