When the Fed buys bonds in the open market, in the product market (the aggregate demand- aggregate supply model),
A) real GDP will fall and the price level will rise.
B) real GDP and the price level will rise.
C) real GDP and the price level will fall.
D) real GDP will rise and the price level will fall.
Ans: B) real GDP and the price level will rise.
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Reparations for slavery in the United States would
A) be consistent with the Pareto principle. B) be inconsistent with the Pareto principle. C) have nothing to do with the Pareto principle. D) be unconstitutional.
As any firm with decreasing returns to scale increases its output:
A. its average cost of production must rise. B. its average cost of production must fall. C. its total cost of production must fall. D. its marginal cost of production must rise.
The economic inefficiency in an oligopoly may be reduced by the following, except:
A. Increased competition from foreign producers B. Limit pricing due to potential entrants C. Economic profits used to fund technological advance D. Aggressive advertising by rivals
What are the consequences of a firm exercising monopoly power?
A. Higher price and larger quantity sold. B. Higher price and smaller quantity sold. C. Lower price and larger quantity sold. D. Lower price and smaller quantity sold.