An open market ________ by the Fed increases interest rates and ________ output.
A. sale; increases
B. sale; decreases
C. purchase; increases
D. purchase; decreases
Answer: B
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The direct exchange of goods and services for other goods and services without the use of money is
A) barter. B) financial intermediaries. C) a store of value. D) a standard of deferred payment.
During an inflationary period, a household with savings of $100,000
A) loses because inflation increases the real tax on the interest paid. B) gains because the inflation gives savers more money and so more purchasing power. C) loses because the inflation increases the after-tax real interest rate. D) gains because inflation increases the value of their savings. E) neither gains nor loses because inflation does not affect savers.
Monetary restraint and fiscal stimulus will
A) both lower the real rate of interest. B) both raise the real rate of interest. C) have differing effects on the real rate of interest. D) Both raise the level of output.
The short-run Phillips curve shifts upward whenever:
a. inflation rises. b. a negative supply shock occurs. c. unemployment rises. d. all of the above.