Suppose that the IS curve is stable and money demand is lower than forecasted
If the Fed is targeting the interest rate, it notices the rate is ________ its target, and action to correct this, shifting the LM curve to the ________, causes GDP to ________ natural GDP. A) below, right, fall back toward
B) below, right, rise further from
C) below, left, return to
D) above, left, fall back from
E) above, right, rise further from
C
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Which of the following statements is correct?
A) The demand curve of the perfectly competitive industry is elastic as are the demand curves facing the individual firms. B) The market demand curve of perfect competition is inelastic because the individual consumers are buying a homogeneous product. C) The market demand curve of the perfectly competitive industry is downward sloping while the demand curve of an individual firm is horizontal with a height equal to the product price. D) The market demand curve of the perfectly competitive industry is downward sloping, so the demand curves of the individual firms are also downward sloping.
Suppose country A pegs its nominal exchange rate to country B and that country A has a higher inflation rate than country B. In this situation, country A will experience
A) a real appreciation. B) a worsening trade position. C) an increase in the real exchange rate. D) all of the above E) none of the above