How long does it take for the rate to adjust when the Fed announces a change to its target for the federal funds rate?
A. The rate never fully adjusts because the Fed announces planned changes so frequently.
B. Sometimes it adjusts before the Fed even takes any action.
C. It can take several days or weeks for rates to fully adjust to announced changes from the Fed.
D. The rate usually adjusts immediately after the Fed takes action to change the rate.
Ans: B. Sometimes it adjusts before the Fed even takes any action.
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A rent ceiling on housing creates a problem of allocating the available housing units because
A) the demand for housing decreases and the demand curve shifts leftward. B) the supply of housing increases and the supply curve shifts rightward. C) a shortage of apartments occurs. D) a surplus of apartments occurs. E) it eliminates search, which is one of the major ways housing units are allocated.
When Milton Friedman said that inflation is always and everywhere a monetary phenomenon, he was referring to
A) one-shot inflation B) supply-induced inflation C) continued inflation D) hyperinflation (high rates of inflation) E) all kinds of inflation