Political institutions are more likely to allow and encourage the emergence of good economic institutions and policies when
a. the top government executives have enough power to impose good economic arrangements on the nation.
b. constitutional constraints prevent laws and regulations that weaken the rights of property owners, curtail voluntary exchange, and provide for decentralization of government.
c. the elected executive and legislative branches have fewer constraints on what they can do, leaving them free to innovate and improve economic institutions.
d. well organized interest groups exert a powerful influence on the political process.
B
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If the price of Italian shoes imported into the United States increases, then
a. both the GDP deflator and the consumer price index will increase. b. neither the GDP deflator nor the consumer price index will increase. c. the GDP deflator will increase, but the consumer price index will not increase. d. the consumer price index will increase, but the GDP deflator will not increase.
Suppose that the current federal funds rate is above the federal funds target rate. In order to lower the federal funds rate the Fed will ________________ securities on the open market which will ________________ the supply of reserves in the market for reserves, pushing the rate closer to the target rate
A) sell; increase B) purchase; increase C) purchase; decrease D) sell; decrease