Because prices are slow to move in the short-run, when the Federal Reserve lowers the federal funds rate
A) nominal interest rates rise.
B) real interest rates fall.
C) inflation falls.
D) real interest rates rise.
B
You might also like to view...
When consumers' incomes increased 10 percent, the quantity of milk bought increased 5 percent. This result means
A) the demand for milk is income elastic. B) milk is a necessity. C) milk is a luxury. D) milk is an inferior good.
Appendix: Winning an auction can be exhilarating, but it can also lead to doubt as to whether you did the right thing or not. This is called:
a. The regret effect. b. Moral hazard. c. Second wind. d. The winner's curse.
If savings exceeds investment at full employment, demand will fall short of total output
a. True b. False Indicate whether the statement is true or false
Which of the following is NOT an economic function of government?
A) providing a legal system B) ensuring economic stability C) providing government-inhibited goods D) promoting competition