If the public has correct rational expectations and the Fed increases both reserve requirements and the discount rate, it would be expected to result in:
a. a higher level of real output and a lower price level.
b. a lower price level but no change in real output
c. a higher price level and a reduced level of real output.
d. a higher price level but no change in real output.
b
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Suppose the refrigerator industry has an HHI of 2,500 while the aluminum industry's HHI is 6,850 . Is this information sufficient to conclude that the aluminum market is more concentrated than market for refrigerators? Explain your answer
What will be an ideal response?
The recession of 2007-2009 made many consumers pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve?
A) This will shift the aggregate demand curve to the left. B) This will move the economy up along a stationary aggregate demand curve. C) This will shift the aggregate demand curve to the right. D) This will move the economy down along a stationary aggregate demand curve.
From 1990s until 2012, the Japanese economy has experienced
A) easy monetary policy as indicated by falling nominal interest rates. B) easy monetary policy as indicated by short-term interest rates near zero. C) tight monetary policy as indicated by falling asset prices. D) tight monetary policy as indicated by short-term interest rates near zero.
Central banks can increase the money supply by:
a. Raising margin requirements. b. Selling government securities. c. Buying foreign exchange. d. Increasing the discount rate. e. None of the above.