Which of the following is likely to happen due to a contractionary monetary policy?
A) An increase in the inflation rate B) An increase in labor supply
C) An increase in the federal funds rate D) An increase in labor demand
C
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A technological improvement lowers the cost of producing coffee. At the same time, consumers' preferences for coffee increase. The equilibrium price of coffee will
A) rise. B) fall. C) remain the same. D) rise, fall, or stay the same, depending on the relative size of the shifts in the demand and supply curves.
Which of the following examples shows the problem caused by the Fed’s lack of control over certain financial entities?
a. The Fed’s expansionary policy backfires because the government raises taxes. b. The Fed’s contractionary policy backfires because the estimated MPC is inaccurate. c. The Fed’s expansionary policy is neutralized by decreased consumer confidence. d. The Fed’s contractionary policy is counteracted by the policies of Chinese banks.
Short-term interest rates show the cost of borrowing money for how long?
(A) Between 10 and 30 years. (B) For no more than a month. (C) For a few days or months. (D) Between a few months and two years.
What is the main cause of the uneven distribution of economic growth seen around the world?
What will be an ideal response?