When the Federal Reserve calls in a discount loan from a bank, the monetary base ________ and reserves ________
A) remains unchanged; decrease
B) remains unchanged; increase
C) decreases; decrease
D) decreases; remains unchanged
C
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Potential GDP is estimated to grow at a rate of 3.2% in the United States. Actual GDP in the U.S
A) always grows at a slower rate than potential GDP. B) is the same as potential GDP if all firms in the economy were working at capacity. C) always grows at the same rate as potential GDP. D) always grows at a faster rate than potential GDP.
The international trade response to a contractionary monetary policy will cause aggregate demand to shift ____ and aggregate supply to shift ____
a. outward, outward b. inward, outward c. outward, inward d. inward, inward
Quotas on imported automobiles cost jobs in the U.S. automobile industry but lower auto prices for domestic consumers.
Answer the following statement true (T) or false (F)
A circular-flow diagram is a model that
a. helps to explain how participants in the economy interact with one another.
b. helps to explain how the economy is organized.
c. incorporates all aspects of the real economy.
d. Both (a) and (b) are correct.