If the government chooses to finance its debt interest obligations by issuing bonds that are purchased by the Federal Reserve,
a. the money supply will remain the same because the Fed pays for the bonds by creating an equivalent deposit at the Treasury
b. external debt will be decreased dramatically
c. overconsumption will be halted
d. the money supply will decrease, causing deflation
e. the money supply will increase, causing inflation
E
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The supply-side shocks of the 1970s shifted the aggregate supply curve inward
a. True b. False Indicate whether the statement is true or false
Which of the following is one of the functions of rental prices?
A) to redistribute income from landlords to renters B) to redistribute income from renters to landlords C) to signal to the local government when taxes on rental units should be increased D) to ration the use of existing housing for current consumers