Suppose policy makers implement an unexpected fiscal expansion. Further assume that monetary policy is expected to keep interest rates constant in response to this unexpected fiscal expansion. Given this information, we would expect that
A) stock prices will rise.
B) stock prices will remain constant.
C) this policy will have an ambiguous effect on stock prices.
D) the effect on stock prices will depend on the slope of the IS curve.
A
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The Fed purchases $100 million of U.S. government securities from First National Bank. The balance sheet for First National Bank shows ________ in its total assets and ________ in its total liabilities
A) no change; no change B) a $100 million increase; a $100 million increase C) a $100 million decrease; a $100 million increase D) a $100 million increase; no change E) a $100 million increase; a $100 million decrease
In the period 1960–95,
(a) the relations between capital and labor (owners and workers) continued to be as hostile and violent as they were in the 1930s and earlier. (b) the relations between capital and labor (owners and workers) continued to be cooperative and peaceful, as they had been throughout U.S. history. (c) an accord was struck which involved more cooperative relations between capital and labor and encouraged high rates of productivity in industry. (d) the federal government intervened with a strong hand to ensure that labor and capital worked together cooperatively.
Which of the following would shift the aggregate demand curve to the right?
a. Increases in government purchases, investment spending, autonomous consumption, taxes, or the money supply b. Increases in government purchases, investment spending, autonomous consumption, or the money supply c. Decreases in government purchases, investment spending, autonomous consumption, taxes, or the money supply d. Increases in government purchases, investment spending, autonomous consumption or taxes e. Decreases in government purchases or investment spending, and increases in autonomous consumption, taxes, or the money supply
The Monetarist transmission mechanism through which monetary policy affects the price level, real GDP, and employment depends on the:
a. indirect impact of changes on profit expectations. b. direct impact of changes in the money supply on aggregate demand. c. direct impact of changes in fiscal policy on aggregate demand. d. indirect impact of changes on the interest rate.