Why does the Federal Reserve System raise interest rates?
A. To overcome inequalities of income distribution
B. To increase demand for products
C. To decrease supply of products
D. To fight inflation
D. To fight inflation
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If the Fed wants to permanently lower interest rates, then it should raise the rate of money growth if
A) there is fast adjustment of expected inflation. B) there is slow adjustment of expected inflation. C) the liquidity effect is smaller than the expected inflation effect. D) the liquidity effect is larger than the other effects.
Which of the following is NOT a discount bond?
A) a U.S. savings bond B) a U.S. Treasury bill C) a U.S. Treasury note D) a zero-coupon bond
The share of the labor force that was unionized fell from more than 30 percent in the 1950s to less than 15 percent in the 2000s. During this time period, the share of national income allocated to labor (in contrast to capital)
a. decreased by approximately 10 percent. b. decreased by more than 15 percent. c. increased by 10 percent. d. was virtually unchanged.
If Congress and the president pursue an expansionary fiscal policy at the same time as the Federal Reserve pursues an expansionary monetary policy, how might the expansionary monetary policy affect the extent of crowding out in the short run?
What will be an ideal response?