If the Fed pursues expansionary monetary policy then
A) the money supply will increase, interest rates will rise and GDP will rise.
B) the money supply will decrease, interest rates will fall and GDP will fall.
C) the money supply will decrease, interest rates will rise and GDP will fall.
D) the money supply will increase, interest rates will fall and GDP will rise.
D
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Factors that led to worsening financial market conditions in East Asia in 1997-1998 include
A) weak supervision by bank regulators. B) a rise in interest rates abroad. C) unanticipated increases in the price level. D) increased uncertainty from political shocks.
Equilibrium market prices for capital and labor are $10 and $8, respectively. Then, the economy experiences one or more supply shocks, so that the marginal product of capital is $9, and the marginal product of labor is $6
Assuming that the available quantities of capital and labor are fixed, which of the following is (are) likely to decrease as the economy approaches its new equilibrium? A) economic profits B) real rental price of capital C) total output D) the quantity of capital in use E) none of the above