Suppose you read in the paper that the Federal Reserve plans to expand the money supply. The Fed is most likely to do this by
A. selling government bonds to the public.
B. purchasing government bonds from the public.
C. buying newly issued government bonds directly from the government itself.
D. printing more currency and distributing it.
Answer: B
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If imperfect information characterizes workers' behavior, then there will be a
A) slow adjustment of the demand for labor, Nd. B) rapid adjustment of the demand for labor, Nd. C) rapid adjustment of both the demand for labor, Nd, and the supply of labor, Ns. D) a lagged adjustment of the equilibrium level of employment, Ns.
Using the expectations hypothesis on the term structure of interest rates, explain the relationship between the interest rate on a one-year Treasury bond and the interest rate on a two-year Treasury bond
What will be an ideal response?
If the short-run Phillips curve has a very flat slope, the
a. structural deficit will grow during inflation. b. structural deficit will fall during recession. c. inflation costs of reducing unemployment are relatively low. d. inflation costs of reducing unemployment are relatively high.
As the U.S. price level rises relative to price levels in other countries, U.S. _____
Fill in the blank(s) with the appropriate word(s).