Using the money demand and money supply model, an open market sale of Treasury securities by the Federal Reserve would cause the equilibrium interest rate to
A) increase.
B) decrease.
C) not change.
D) increase, then decrease.
Answer: A
You might also like to view...
In a small country, the adult population equals 10,000. In that country, 8,000 people are in the labor force and 200 people are unemployed. The unemployment rate equals
A) 2.5 percent. B) 2 percent. C) 4 percent. D) an undetermined amount given the lack of information.
The price level in the economy between 2014 and 2015 rose from 100 to 105. Between 2015 and 2016, the price level rose from 105 to 110.25. How does the short-run Phillips curve predict the unemployment rate will change as a result?
A) The unemployment rate will decrease since inflation decreased. B) The unemployment rate would not change since there is no change in the rate of inflation. C) The unemployment rate will increase since inflation increased. D) The unemployment rate will decrease since inflation increased.
Inventory reductions are a signal indicating that
A. the economy is close to disaster. B. the Dow Jones Industrial Average will fall. C. manufacturers need to increase production. D. producers need to lower prices.
All other things constant, the entry of new firms into a labor intensive industry like carpet weaving is likely to: a. shift the market demand for labor curve to the right
b. make the market demand for labor curve steeper. c. shift the demand for labor curve for each carpet producer to the left. d. shift the market supply of labor curve to the left.