Suppose commodity demand is stronger than expected, and money demand is stable
If the Fed is targeting the interest rate, it notices the rate is ________ its target, and action to correct this, shifting the LM curve to the ________, causes GDP to ________ natural GDP. A) below, right, fall back toward
B) below, right, rise further toward
C) below, left, rise further from
D) above, left, fall back from
E) above, right, rise further from
E
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A firm hires labor up to the point where the
A) real wage rate equals the nominal wage rate. B) real wage rate exceeds the nominal wage rate. C) additional hour of labor produces extra output that equals the real wage rate. D) additional hour of labor produces extra output that equals the nominal wage rate. E) firm can sell the extra output.
If higher inflation ensues from a temporary negative supply shock, and in response, the central bank raises interest rates, then ________
A) it is likely adopting a policy to stabilize inflation in the short run B) short-run inflation will fluctuate around (first go higher then go lower than) the long run level of inflation C) it will need to lower interest rates back to their original values to ensure that inflation returns to its original rate D) all of the above E) none of the above
The report of the 1911 National Monetary Commission
(a) advocated a turn to bimetallism. (b) advocated unification of the state and national banking systems. (c) advocated centralized reserve associations which would coordinate commercial banking processes such as check clearing. (d) advocated a unified central bank modeled after the Bank of England.
Is keeping money growth low when the central bank can accurately forecast real growth a guarantee that short-run inflation will not occur? Explain
What will be an ideal response?