For individuals who are holding money or fixed dollar value assets, inflation has the effect of:
a. improving their ability to purchase goods and services with those dollars.
b. reducing their ability to purchase goods and services with those dollars.
c. increasing the purchasing power of those dollars
d. demonstrating the interest rate effect.
b
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Public goods
A) are products supplied by the government. B) are consumed by everyone when one person consumes them. C) are efficiently produced by profit-seeking firms. D) are freely traded on a market.
If the Fed were to purchase euros for dollars and at the same time sell U.S. Treasury securities in the open market, this would be an example of:
A. the Fed not changing their balance sheet at all. B. the Fed altering the domestic monetary base. C. an unsterilized foreign exchange intervention. D. a sterilized foreign exchange intervention.
Refer to the information provided in Table 24.3 below to answer the question(s) that follow.
Table 24.3
Refer to Table 24.3. At an output level of $600 billion, disposable income equals
A. zero. B. $100 billion. C. $300 billion. D. $500 billion.
Which of the following brings only an increase in the quantity demanded of a good?
A) a decrease in income, assuming the good is an inferior good B) a rise in the price of a substitute good C) a fall in the price of the good itself D) an expectation that the good's price will rise in the future E) a decrease in income, assuming the good is a normal good