An increase in expected inflation for any given nominal interest rate will cause the:
A. bond supply curve to shift to the left.
B. price of bonds to increase.
C. bond demand curve to shift to the right.
D. price of bonds to decrease.
Answer: D
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Refer to Table 2.3. Assume that 2010 is the base year. The GDP deflator for 2013 is
A) 67.1. B) 84.5. C) 100.0. D) 118.3.
Why might Congress benefit from the Fed being self-financed?
A) Self-financing increases Congressional control over the Fed. B) Self-financing reduces the Fed's exposure to external pressures. C) Self-financing gives the Fed an incentive to expand the money supply, which ultimately results in Congress having additional funds to spend. D) Congress does not benefit from the Fed being self-financed; Congress is obliged by the Constitution to allow the Fed to be self-financed.