If the Federal Reserve targets the money supply, and the money demand curve shifts to the left, then the Fed
A) can maintain the money supply target, but at a lower interest rate.
B) can maintain the money supply target with no change in the interest rate.
C) can maintain the money supply target, but at a higher interest rate.
D) cannot maintain the money supply target.
A
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Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. If Leo values income and not the source of the income, then if he can only earn $400 he will choose to:
A. not work and accept the benefits. B. not work and refuse the benefits. C. work part time. D. work.
The less sensitive quantity demanded is to a change in price, the
A) smaller a change in price must be to induce a certain change in quantity demanded. B) greater the absolute price elasticity of demand. C) smaller the absolute price elasticity of demand. D) closer the absolute price elasticity of demand is to one.
When the level of insurance premiums that someone pays is equal to the amount that an average person in that risk group would collect in insurance payments, the level of insurance is said to be:
a. risk-balanced. b. successful. c. actuarially fair. d. at the threshold of risk.
A linear, upward-sloping supply curve has
a. a constant slope and a changing price elasticity of supply. b. a changing slope and a constant price elasticity of supply. c. both a constant slope and a constant price elasticity of supply. d. both a changing slope and a changing price elasticity of supply.