Since 1946, the president of the United States has received guidance from a group comprised of three members and a staff of a few dozen economists known as the

Suppose that the United Kingdom pegs the pound to the euro and the European Central Bank decides to use monetary policy to offset the possible inflationary effects of European expansionary fiscal policy. How would the European Central Bank's monetary policy affect European interest rates?

A) They would rise. B) They would fall. C) The combination of the expansionary fiscal policy and the monetary policy would cause interest rates to return to their level prior to the expansionary fiscal policy. D) The combination of the expansionary fiscal policy and the monetary policy would not affect interest rates.

Suppose that during a given month 500,000 persons quit their job to become self-employed. This will cause

A) the unemployment rate to fall. B) the unemployment rate to rise. C) payroll employment to rise. D) payroll employment to fall. E) no change in either the unemployment rate or payroll employment.