A decrease in a broad index of commodity prices suggests to the Fed that
a. money is plentiful, and the Fed should conduct restrictive policy.
b. money is plentiful, and the Fed should conduct expansionary policy.
c. deflation is a potential future danger, and the Fed should conduct expansionary policy.
d. future prices will likely increase, and the Fed should conduct expansionary policy.
C
You might also like to view...
What is the Fed's monetary policy instrument?
What will be an ideal response?
A price floor that is set above the equilibrium price
A) causes suppliers to lower their prices. B) is binding. C) is non-binding. D) creates a shortage.
The principal benefit of unemployment insurance is that it
A. reduces the occurrence of unemployment in the economy. B. replaces income lost due to unemployment. C. increases labor force participation. D. helps reduce the period of unemployment.
An example of a nontradable good is:
A. a lead-painted toy from China. B. a stack of firewood from Montreal, Canada. C. a dish of handmade pasta in Lucca, Italy. D. All of these would be considered a nontradable good.