Between 2003 and 2008, the actual federal funds rate
A) tended to be lower than the rates predicted by the Taylor rule.
B) tended to higher than the rates predicted by the Taylor rule.
C) followed closely the rates predicted by the Taylor rule.
D) moved in directions opposite to the rates predicted by the Taylor rule.
Ans: A) tended to be lower than the rates predicted by the Taylor rule.
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A decrease in interest rates caused by a change in the price level would cause a(n) ________.
A. increase (or shift right) in aggregate demand B. decrease in the quantity of real output demanded (or movement up along AD) C. increase in the quantity of real output demanded (or movement down along AD) D. decrease (or shift left) in aggregate demand
Assume that there is a 25% reserve requirement and that the Federal Reserve buys $200 million worth of government securities. If the securities are purchased from the public, then this action has the potential to increase bank lending by a maximum of ________.
A. $800 million, and also by $800 million if the securities are purchased directly from commercial banks B. $600 million, and also by $600 million if the securities are purchased directly from commercial banks C. $800 million, but only by $600 million if the securities are purchased directly from commercial banks D. $600 million, but by $800 million if the securities are purchased directly from commercial banks
In the figure above, what is the equilibrium price and quantity?
What will be an ideal response?
The area between the market price and the demand curve provides a measure of: a. consumer surplus
b. producer surplus. c. consumer surplus plus producer surplus. d. marginal utility.