If policymakers attempt to offset a favorable inflation shock with monetary ________, the resulting long-run equilibrium will be at ________ inflation rate compared to allowing the self-correcting mechanism return the economy to potential output.
A. easing; a lower
B. easing; a higher
C. tightening; a higher
D. tightening; a lower
Answer: D
You might also like to view...
If velocity is constant and equal to 2, a $10 billion shift of the LM curve to the left will be produced by a __________ in the money supply
A) $5 billion increase B) $5 billion decrease C) $20 billion increase D) $20 billion decrease
Fiat money is money
a. that has little intrinsic value and is not backed by a commodity. b. that is not included as part of the M1 money supply. c. that is backed by gold or silver held on reserve by the government. d. such as coins that are made from metal.
What happens to desired investment spending if the interest rate rises? Is this response relevant to the supply of loanable funds curve or the demand for loanable funds curve?
Using the equation of exchange, if the nominal GDP is $8,000 billion and the money supply is $1,600 billion, then
A) the price level is 5.0. B) the price level is 0.2. C) velocity is 5.0. D) velocity is 0.2.