What does the Fed do when the initial equilibrium rate is below the target rate?
a. Decrease the price level.
b. Increase the price level.
c. Decrease the money supply.
d. Increase the money supply.
c. Decrease the money supply.
You might also like to view...
Refer to the figure above. What is the initial equilibrium employment and wage rate?
A) 10 units of labor and $25 B) 20 units of labor and $25 C) 30 units of labor and $15 D) 10 units of labor and $35
The above table gives data for the nation of Mouseville. There are no imports into or exports from Mouseville. If real GDP is equal to $400 billion then,
A) unplanned inventory is -$300 billion. B) aggregate expenditure is equal to consumption expenditure. C) unplanned inventory is -$200 billion. D) aggregate expenditure is $450 billion. E) unplanned inventory is $200 billion.
Large commercial banks are considered to be market makers because:
A) without them, there would be no foreign exchange market B) they can easily manipulate the value of currencies in the foreign exchange market C) they are willing to buy and sell major currencies at any time D) they created the foreign exchange market
Use the above figure. The total profit earned by this monopolistically competitive firm is
A) $2,560. B) $1,600. C) $480. D) $1,900.