Refer to Figure 10.5. A shift from MP1 to MP3 will occur if
A) investors increase the short-term interest they expect in the future.
B) investors increase the term premium they require on long-term bonds.
C) the Fed decreases its target for the short-term nominal interest rate.
D) the expected inflation rate decreases.
C
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Suppose the official unemployment rate is 10 percent. We can conclude without question that:
a. the same 10 percent of the people in the economy were out of work for the entire ear. b. one of every 10 people in the civilian labor force is currently unemployed. c. the same 10 percent of the people in the civilian labor force were out of work for the entire year. d. every person in the civilian labor force was out of work for 10 percent of the year. e. 10 percent of the people in the economy were out of work for 10 percent of the year.
The economy can produce 15X and 15Y, 10X and 20Y, 5X and 25Y, or OX and 30Y. It follows that the production possibility frontier (PPF) is
A) a downward-sloping straight line. B) an upward-sloping straight line. C) a downward-sloping convex curve. D) a downward-sloping concave curve.