What impact would the Fed's raising the interest rate have on any inflationary pressure in the economy?
A) An increase in interest rates decreases the money demand, which could slow increases in the price level.
B) An increase in interest rates decreases the exchange rate, which causes net exports to rise, generating inflation.
C) An increase in interest rates increases real GDP, which creates inflation in an economy.
D) An increase in interest rates increases the money supply, which could cause the price level to increase.
A
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A sterilized central bank intervention does not affect the domestic money supply
Indicate whether the statement is true or false
When marginal utility is positive and increasing, then
a. total utility must be negative. b. total utility must be increasing at an increasing rate. c. total utility must be increasing at a decreasing rate. d. total utility is decreasing. e. total utility is at its maximum point.
The short-run Phillips curve could shift to the left as a result of either ____ or ____
a. rising oil prices; increasing inflation expectations b. rising wages; falling prices c. declining oil prices; falling inflation expectations d. falling wages; rising prices
These are the cost and revenue curves associated with a firm.
If the firm in the given graph were to produce Q2 and charge P2, then:
A. economic profit would be negative. B. profits would be maximized. C. producer surplus would be zero. D. deadweight loss would be positive.