The aggregate demand shifts to the left if
A) the government increases spending.
B) the Fed sells government bonds.
C) the government decreases taxes.
D) the Fed decreases the required reserve ratio.
Answer: B) the Fed sells government bonds.
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Exhibit 30-4
?
A. Q1. B. Q2. C. Q1 - Q2. D. Q2 - Q1.
The real interest rate for investments reflects not only the short-term real interest rate set by the central bank, but also the financial frictions
When the policy rate has hit the floor of zero, to stimulate the economy at given inflation rates, policymakers can A) lower the financial frictions. B) lower the short-term real interest rate. C) lower both the short-term real interest rate and the financial frictions. D) lower the policy rate.
Even with the big three textbook publishers (McGraw-Hill, Pearson, and Cengage) having a large market share, the textbook industry is still considered a ____________ model because of the high level of competition that exists.
A. cartel B. cut throat competitor C. open collusion D. price leadership
Which statement is true?
A. The prime rate moves in the opposite direction from changes in the discount rate. B. The Fed raised the Federal funds target rate and the discount rate from 1989 to mid-1992 to counter the slowdown in the economy. C. The Federal funds target rate, the discount rate, and the prime rate generally rise and fall together. D. The discount rate is generally 2% above the prime rate.