Since 1970, the Fed has usually raised interest rates to combat inflation, even when output was low.
Answer the following statement true (T) or false (F)
True
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Holding all else constant, an increase in the preferences of Americans for Mexican goods will ________ the supply of dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. decrease; decrease B. decrease; increase C. increase; increase D. increase; decrease
How is it possible for consumption expenditure to be positive even when disposable income is zero?
What will be an ideal response?
Fiscal policy is most effective in controlling inflation when the economy operates in the _____ region of the aggregate supply curve
a. horizontal b. vertical c. upward rising d. downward sloping e. backward bending
A cold spell in Florida extensively reduced the orange crop, and as a result, California oranges commanded a higher price. Which of the following statements best explains the situation?
a. The supply of Florida oranges fell, causing the supply of California oranges to increase as well as their price. b. The supply of Florida oranges fell, causing the supply of California oranges to decrease and their price to increase. c. The supply of Florida oranges fell, causing their price to increase and the demand for California oranges to increase. d. The demand for Florida oranges was reduced by the freeze, causing an increase in the price of California oranges and a greater demand for them.