When there is a threat of inflation in the economy, the Fed can ________ the federal funds rate so as to ________ aggregate demand and ________ the price level
A) lower; increase; decrease
B) raise; decrease; increase
C) lower; increase; increase
D) raise; decrease; decrease
E) raise; increase; decrease
D
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Refer to the production possibility graph above. Assume that the economy is in equilibrium at point e. If the labor supply increases due to immigration, the new equilibrium is most likely to be
A) point h. B) point f. C) point d. D) point e. E) point b.
If you believe that government can effectively manage aggregate demand to achieve full employment without inflation, you are a member in good standing in the
a. classical school b. Keynesian school c. neo-Keynesian school d. rational expectations school e. supply-side school
If the amount of money in circulation is $180 billion and the value of the economy's total output is $540 billion, then the:
A. circulation period of money must be one-fourth of a year. B. velocity of money is 4. C. average price per final good sold is $3. D. velocity of money is 3.
The less elastic is the demand for a firm's product, the greater is that firm's market power
Indicate whether the statement is true or false