If the Fed purchases U.S. government securities in the open market, all of the following would occur EXCEPT
A. an expansion of the money supply.
B. a fall in bond prices.
C. an increase in real Gross Domestic Product (GDP).
D. an increase in investment.
Answer: B
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The above figure shows the demand and cost curves for a firm in monopolistic competition. In the figure, the firm makes an economic profit of
A) $0. B) $20. C) $40. D) $120.
The expectations effect is the
A) increase in the interest rate brought on by an expected increase in Real GDP. B) increase in the interest rate due to a higher expected inflation rate. C) decrease in the interest rate due to an expected increase in the supply of loanable funds. D) idea that people form their expectations of inflation by considering all available information about past, present, and future inflation. E) idea that people form their expectations of inflation by considering only information about past inflation experience.
Malthus predicted that:
A. income would eventually grow faster than population, so per capita income would eventually begin to increase. B. population and income would eventually grow at the same rate, so per capita income would increase over time. C. population and income would eventually grow at the same rate, so per capita income would eventually be constant. D. population would eventually grow faster than income, so per capita income would eventually begin to decrease.
Does an expansionary gap or a recessionary gap exist if short-run output is $20.0 trillion and potential output is $21.0 trillion?
What will be an ideal response?