The interest rate on federal government bonds.
The interest rate on short-term loans of reserves from one bank to another.
The interest rate banks charge the federal government.
The interest rate banks charge their most creditworthy customers.
Hold their deposits as reserves.
Decrease the money supply.
Increase or decrease the money supply.
Cause no change in the money supply.
Increase the money supply.
Open market purchases of government securities.
Open market sales of government securities.
A decrease in the discount rate.
A decrease in the reserve requirements.
Lower the discount rate.
Lower reserve requirements
Engage in open market sales of government securities.
Engage in open market purchases of government securities.
Increase, only if the level of investment is low relative to historic levels.
remain the same.
Increase, only if the level of unemployment is high.
Increases, decrease, increase
Decreases, increase, decrease
Increases, increase, increase
Decreases, decrease, decrease
Ncreases, increase, decrease
The aggregate purchases line will shift upward by a larger amount than occurs when the investment demand curve is downward-sloping.
Monetary policy will be particularly effective in reducing the equilibrium level of real GDP.
The aggregate demand curve will shift to the left, if the money supply is increased.
Monetary policy will have no effect on the equilibrium level of real GDP in the short run.
Monetary policy will be particularly effective in increasing the equilibrium level of real GDP.
Contractionary, increase, increase
Contractionary, decrease, decrease
Contractionary, decrease, increase
Expansionary, decrease, decrease
Expansionary, increase, decrease
The rate of population growth and the rate of growth in nominal GDP.
The rate of growth in real wages and the rate of growth in real GDP.
The rate of growth in the money supply and the rate of growth in nominal GDP.
The rate of unemployment and the rate of economic growth.
The rate of growth in the money supply and the rate of growth in real GDP.
The inflation rate will be 3%.
The inflation rate will be 1%.
The economy will achieve noninflationary growth.
The inflation rate will be 5%.
It equals the rate of growth in nominal wages.
It equals the growth rate of nominal GDP.
It equals the rate of population growth.
It equals the growth rate of real GDP.
Interest rates will fall.
It's impossible to predict whether interest rates will rise or fall.
There will be no effect on interest rates.
Interest rates will rise.
Decrease taxes, and increase expenditures.
Decrease the money supply.
Decrease expenditures, and increase taxes
All of the above.
Increasing purchases by $1,600 billion.
Increasing purchases by $400 billion.
Reducing purchases by $1,600 billion
Reducing purchases by $400 billion.
Reducing purchases by $800 billion.
An inflationary GDP gap of $75 billion exists.
A recessionary GDP gap of $75 billion exists.
A recessionary GDP gap of less than $75 billion exists, due to the existence of the multiplier effect.
An inflationary GDP gap of less than $75 billion exists, due to the existence of the multiplier effect.
A recessionary GDP gap of more than $75 billion exists
The rise in tax revenue that occurs as a result of growth in real GDP.
The increase in government spending that occurs as the result of new spending bills passed by Congress.
The reduction in the money supply that occurs as banks become less willing to make loans during a recession.
The reduction in real wages that occurs as the economy goes into a recession.
All of the above.
Primarily involve attempts to shift the aggregate demand curve to the right.
Are not concerned with the long run
Are primarily concerned with affecting the short-run aggregate supply curve, rather than the aggregate demand curve.
Involve the use of tax-code changes to increase the incentives to supply economic resources to the market.
Are designed to improve overall equality in the nation's distribution of income, so that employee morale and productivity will increase.
Money creation is purely expansionary, whereas borrowing from the public enables fiscal policy to be either expansionary or contractionary.
Money creation would probably be highly inflationary.
Borrowing from the public negates the inflationary effect of a deficit.
The printing of new currency raises a second problem--that of getting the currency into public circulation.
The Federal Reserve System is often unable to accommodate the Treasury and adhere to its money supply targets.
An increase in consumer spending.
An increase in corporate and personal income tax rates.
An increase in interest rates and a reduction in investment.
A decrease in government spending on Social Security.
Change in a manner that can't be predicted without more information.
Increase only if the shift in the demand curve is larger than the shift in the supply curve.
Remain the same.
A comparative advantage.
A specialization advantage.
A production advantage.
An absolute advantage.
Purchase resources from other nations until it acquires a comparative advantage in at least one product.
Specialize in producing those products that have the lowest opportunity cost per unit compared to other nations, then trade some of its output.
Specialize in the production of those goods that have the highest opportunity cost, then trade the excess output.
Produce only those goods in which it has an absolute advantage over other nations.