If the Fed unexpectedly shifts to a more expansionary monetary policy, which of the following will most likely occur in the short run?
a. a decrease in the real interest rate
b. an increase in unemployment
c. a decrease in real GDP
d. an increase in the nominal interest rate
A
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By making exchange ________, money allows for ________ and higher ________
A) harder; specialization; costs B) easier; specialization; productivity C) easier; specialization; costs D) harder; generalization; productivity
A country operates inside its production possibilities curve; this may be caused by
A) unemployed resources. B) total efficiency in industry. C) a new resource being discovered. D) a lack of modern products being produced.
If financial investors believe that the prices of bonds and other assets will fall,
A) their precautionary demand for money goes up. B) their speculative demand for money goes up. C) their precautionary demand for money goes down. D) their speculative demand for money goes down.
Suppose you received a 5 percent increase in your nominal wage. Over the year, inflation ran about 2 percent. Which of the following is true?
A. Your real wage increased. B. Your nominal wage decreased. C. Both your nominal and real wages decreased. D. Although your nominal wage rose, your real wage decreased.