If the Federal Reserve unexpectedly increases the money supply, which of the following will most likely happen in the short run?

a. real GDP will rise.
b. real GDP will fall.
c. real interest rates will rise.
d. the budget deficit will rise.


A

Economics

You might also like to view...

When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.

A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline

Economics

The marginal social cost of producing a good or service is the

A) cost of producing an additional unit borne by the producer. B) cost of producing an additional unit borne by people other than the producer. C) sum of the marginal private cost and the marginal external cost. D) same as marginal external cost. E) sum of the marginal private cost and the marginal external cost minus the marginal social benefit.

Economics

Everything else held constant, a decrease in the value of the dollar relative to all foreign currencies means that the price of foreign goods purchased by Americans

A) increases B) decreases. C) remains unchanged. D) either increases, decreases, or remains unchanged.

Economics

The demand curve for labor of a monopolist

A) is horizontal even though the demand curve for labor for a competitive firm is downward sloping. B) slopes down for the same reason as the demand curve for labor of a perfectly competitive firm. C) slopes down because of the law of diminishing marginal product and because the monopolist must lower prices to sell additional units of the good. D) slopes upward because monopolists use more capital than do perfectly competitive firms.

Economics