As part of the "wealth channel of monetary policy," a lower money supply __________ bond prices and thus __________ spending
A) raises; raises consumption
B) raises; raises investment
C) lowers; lowers consumption
D) lowers; lowers investment
C
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Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for ramen noodles, an inferior good. Which panel describes what happens in this market as a result of an increase in income?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
Suppose that Country A has an absolute advantage over country B in the production of both wheat and cloth. The opportunity cost of 1 unit of wheat is 2 units of cloth in Country A and 3 units of cloth in Country B. If each country specializes in producing the good in which it is relatively more efficient and then trades for the other good, it follows that
a. all the resulting gains in consumption will go to Country A. b. all the resulting gains in consumption will go to Country B. c. each country will experience half the resulting gains in consumption. d. the allocation of the resulting consumption gains will be determined by bargaining between the two countries.
Which of the following scenarios would serve to decrease the demand for unskilled labor in the U.S.?
a. increased productivity gains among unskilled laborers b. increased demand for goods produced by unskilled laborers c. increased international trade with countries where unskilled labor is more plentiful d. increased supply of migrant workers
In an oligopoly market
A) the pricing decisions of all other firms have no effect on an individual firm. B) individual firms pay no attention to the behavior of other firms. C) advertising of one firm has no effect on all other firms. D) one firm's pricing decision affects all the other firms.