Looking at the macroeconomic statistics for Friedmanland, you discover that at the beginning of the year, the national money supply was equal to $400 million and by the end of the year it was equal to $420 million. You also found out that the inflation rate in Friedmanland was 7%. In this case, you would expect the LM curve to
A. shift up and to the left as the real money supply falls.
B. shift down and to the right as the real money supply falls.
C. shift up and to the left as the real money supply rises.
D. shift down and to the right as the real money supply rises.
Answer: A
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Which of the following statements are TRUE?
A) A bank's assets are its sources of funds. B) A bank's liabilities are its uses of funds. C) A bank's balance sheet shows that total assets equal total liabilities plus equity capital. D) A bank's balance sheet indicates whether or not the bank is profitable.
For developing countries, one of the dangers inherent in the inflows of capital that finance investment is
a. increasing unemployment that accompanies foreign investment. b. rapid outflows of funds that put pressure on exchange rates. c. the deflation that accompanies inflows of foreign capital. d. the inflation that accompanies outflows of foreign capital.
Technological changes can create dislocations as displaced workers try to find jobs elsewhere and at the same time make existing products more affordable
Indicate whether the statement is true or false
What was the response to Germany's expansionary fiscal policy from the German central bank, the Bundesbank?
A) It expanded the money supply to ease rates of interest. B) It made no policy changes. C) It contracted the money supply and raised interest rates. D) It began the process of reverting to a gold standard.