If money demand changes for some reason other than a spending shock, the Fed can stabilize
a. GDP without changing the interest rate
b. GDP, but at the expense of interest rate stability
c. GDP by keeping the interest rate stable
d. the price level by keeping the interest rate stable
e. the price level and GDP by stabilizing the interest rate
C
You might also like to view...
With collective action problems, individual trade-offs are different than the trade-offs for society as a whole
Indicate whether the statement is true or false
If the demand for a monopoly's output shifts rightward, the change in quantity produced is
A) positive. B) negative. C) zero. D) not predictable.
If a bank lends funds in the form of cash, then:
a. M2 stays the same, but M1 rises. b. M1 and M2 fall. c. M1 and M2 do not change. d. M2 rises, and M1 falls. e. M1 and M2 rise.
If one borrower fails to repay a loan,
a. most banks will have serious problems. b. a bank will attempt to sell the loan. c. it will not affect a diversified bank d. the bank will report this to the borrower's employer.