Suppose the Fed decreased the growth rate of the money supply. Which of the following would be lower in the long run?
a. both the natural rate of unemployment and the inflation rate
b. the natural rate of unemployment, but not the inflation rate
c. the inflation rate, but not the natural rate of unemployment
d. neither the natural unemployment rate nor the inflation rate
c
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Which of the following statements is true?
a. A tariff is a physical limit on the quantity of a good allowed to enter a country. b. An embargo is a tax on an imported good. c. A quota is a law that bars trade with another country. d. When a nation exports more than it imports it is running a balance of trade surplus.
What is the main reason why monetary policy has a stronger effect in an open economy than in a closed economy?
a. Changes in the price level affect net exports. b. Changes in the price level affect exchange rates. c. Changes in exchange rates affect output. d. Changes in the interest rate affect exchange rates which, in turn, affect net exports. e. Changes in exchange rates affect the interest rate which, in turn, affects net exports.