Answer the following questions true (T) or false (F)
1. When the Federal Reserve increases the money supply, people spend more because they now have more money.
2. The dynamic aggregate demand and aggregate supply model accounts for the price level rising every year.
3. Expansionary monetary policy enacted during a recession will cause the inflation rate to increase.
1. FALSE
2. TRUE
3. TRUE
You might also like to view...
Refer to the table above. If a trade deficit of $23,000 occurs in the next year, ________, all other variables remaining unchanged
A) gross domestic product will increase to $531,000 B) gross domestic product will fall to $325,000 C) gross domestic product will increase by $2,000 D) gross domestic product will fall by $2,000
Gordon recommends that government macroeconomic policymakers focus on
A) reducing inflation to zero. B) creating a national job finding service to reduce frictional unemployment to near zero. C) creating "enterprise zones" to move jobs to areas of concentrated unemployment. D) programs to match more closely the job skills of the unemployed to those of job vacancies.
The change in fixed costs over the short run is seen in the behavior of marginal costs
Indicate whether the statement is true or false
The exchange-rate effect helps explain what feature in the aggregate demand and aggregate supply model?