In the short run, in which of the following ways is an expansionary monetary policy most likely to cause the real interest rate and the value of the domestic currency to change?
a. increase; increase
b. increase; decrease
c. no change; decrease
d. decrease; increase
e. decrease; decrease
Answer: e. decrease; decrease
You might also like to view...
________ decreases aggregate supply
A) A rise in the money wage rate B) An increase in potential GDP C) A fall in the money wage rate D) An increase the quantity of capital E) A rise in the price level
According to the textbook, government supplies police protection because
A) it is difficult to supply police protection exclusively to people who pay for it. B) police protection is every citizen's right. C) police use force, violence, and coercion. D) the supply of police protection is in the public interest. E) the value of police protection is greater than its marginal cost.
Refer to Table 9-12. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many belts will Morocco consume?
A) 60 B) 70 C) 90 D) 120
In an economic model, an endogenous variable is
A) a stand-in for more complicated variables. B) determined by the model itself. C) determined outside the model. D) a variable that has no effect on the workings of the model.