Suppose the yield curve is initially horizontal. Suppose the current one-year interest rate increases by 4% while the expected future one-year interest rate does not change. Which of the following will tend to occur?
A) i2t will increase by 4%
B) i2t will increase by 2%
C) i2t will increase by less than 2%
D) i2t will decrease by 2%
B
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Refer to Table 15-3. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if the Federal Reserve does not use monetary policy
If the Fed wants to keep real GDP at its potential level in 2017, it should A) buy Treasury securities. B) decrease income taxes. C) sell Treasury securities. D) decrease the required reserve ratio.
Monetarists have received this label because they emphasize the role of the
A. money supply in determining aggregate supply. B. money supply in determining nominal GDP. C. Fed in making monetary policy. D. money supply in determining interest rates and investment.