Which statement is true?
A. Open market operations are seldom conducted any more.
B. The basic way the Fed controls the money supply is by manipulating the discount rate.
C. During periods of severe recession, the Fed tries to push up interest rates.
D. During periods of severe inflation, the Fed tries to push up interest rates.
D. During periods of severe inflation, the Fed tries to push up interest rates.
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Imagine that there are only two nations in the world, the United States and Mexico. If Mexico experiences a drop in the price of foreign exchange, people in Mexico will
a. have to buy more U.S. currency, because prices of imports from the United States will have increased b. end up buying less U.S. currency, because U.S. prices on goods will decrease to everyone c. be able to afford less U.S. currency, and imports from the United States will be more expensive d. be able to afford more U.S. currency, and imports from the United States will be cheaper e. be able to afford more U.S. currency, and imports from the United States will be more expensive
Airlines that restrict members' ability to use frequent flyer miles during holiday periods likely do so because: a. the opportunity cost to airlines of filling seats with frequent flyers is lower at these times
b. the opportunity cost to airlines of filling seats with frequent flyers is higher at these times. c. passengers have more transportation alternatives available to them at these times. d. airlines want to protect their most loyal customers from the discomfort of overcrowded airplanes.
Given that firms change their prices infrequently, a business that has just raised its price will have a __________ relative price; over time as its price remains fixed its relative price __________
Fill in the blank(s) with correct word