If the Fed wants to lower the nominal interest rate in the short run, the Fed ________ the growth rate of the quantity of money
A) raises
B) lowers
C) first lowers and then raises
D) does not change
E) None of the above answers is correct because the premise of the question is wrong since the Fed cannot affect the nominal interest rate, only the real interest rate.
A
Economics
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Suppose the market for loanable funds is in equilibrium. If disposable income increases, the equilibrium real interest rate ________ and the quantity of loanable funds ________
A) falls; increases B) falls; decreases C) rises; decreases D) rises; increases
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If GDP = $300 billion and velocity = 1.5, then the money supply is
A) indeterminate. B) $200 billion. C) $300 billion. D) $450 billion.
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