An unanticipated shift to a more restrictive monetary policy by the Fed will
a. increase real interest rates and, thereby, reduce investment, current consumption, and aggregate demand.
b. reduce real interest rates, leading to a depreciation of the dollar and an expansion in net exports and aggregate demand.
c. increase real interest rates, leading to higher asset prices that will stimulate aggregate demand.
d. reduce real interest rates and, thereby, stimulate investment, current consumption, and aggregate demand.
A
You might also like to view...
How does competition affect entrepreneurs?
A. Raises prices for consumers B. Lowers the cost to produce goods C. Lowers prices for consumers D. Nothing, entrepreneurs do not face competition the same way as businesses
If the multiplier is 4, equilibrium real GDP is $600 billion, and investment is $25 billion, what will happen if investment increases to $30 billion? Real GDP will:
a. increase to $605 billion b. decrease to $595 billion c. increase to $620 billion d. increase to $624 billion e. decrease to $580 billion
The law which prohibits embezzlement of funds by employees or income tax evasion acts as a(n):
a. psychological constraint b. ethical constraint. c. organizational constraint. d. contractual constraint.
Suppose a state charges an in-state student $2,000 in tuition for a college education and charges an out-of -state student $10,000 in tuition. This differential
A) is a result of the state subsidizing education for its residents. B) explains the difference between the demand curve for high-skilled and low-skilled labor. C) explains the difference between the supply curve for high-skilled and low-skilled labor. D) can be corrected via a negative income tax. E) is an example of the positive theories of income redistribution.