When the monetary policymakers raise the target inflation rate they:
A. in effect move up along the current monetary policy reaction curve.
B. in effect shift the monetary policy reaction curve to the left.
C. lower the current real interest rate at every level of current inflation.
D. raise the current real inflation rate at every level of current inflation.
Answer: C
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When the Federal Reserve calls in a discount loan from a bank, the monetary base ________ and reserves ________
A) remains unchanged; decrease B) remains unchanged; increase C) decreases; decrease D) decreases; remains unchanged
Which of the following is likely hardest to resell?
A) An Apple iPod B) A discount airline ticket you bought with your frequent flyer miles C) A used car D) The free spa treatment you won at a raffle
Basil is maximizing his utility from consuming tea and crumpets. If the marginal utility of his last cup of tea was 24 units of utility and that of his last crumpet was 6 units of utility, which of the following is true?
a. The price of tea is six times the price of crumpets. b. The price of crumpets is four times the price of tea. c. The prices of tea and crumpets are equal. d. The price of tea is four times the price of crumpets. e. The MU of the next cup of tea is less than the MU of the next crumpet.
It is usually better for a large country to subsidize its export-oriented industries rather than its import-replacing industries.
Answer the following statement true (T) or false (F)