Your roommate is having trouble grasping how monetary policy works. Which of the following explanations could you use to correctly describe the mechanism by which the Fed can affect the economy through monetary policy? Increasing the money supply
A) lowers the interest rate, raises the value of the dollar, lowers the prices of exports, and raises net exports.
B) raises the interest rate and consumers decrease spending on durable goods.
C) causes people to spend more because they know prices will rise in the future.
D) lowers the interest rate, and firms increase investment spending.
D
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Specialization is another word for
A) pursuing one's comparative advantage. B) the division of labor. C) producing at a comparably lower opportunity cost. D) all of the above. E) none of the above.
Altruism reflects a human motivation that often underlies mutual assistance programs
a. true b. false
A sudden appreciation in the exchange rate of a country deteriorates the terms of trade of the country
a. True b. False Indicate whether the statement is true or false
The elasticity of supply coefficient for bicycles is estimated to be equal to 1.5 . It is expected, therefore, that a 4% increase in price would lead to:
a. a 4% decrease in the quantity of bicycles supplied. b. a 4% increase in the quantity of bicycles supplied. c. a 6% decrease in the quantity of bicycles supplied. d. a 6% increase in the quantity of bicycles supplied.