If real GDP exceeds potential GDP, to move the economy to potential GDP the Fed
A) raises the federal funds rate to increase potential GDP but not real GDP.
B) lowers the federal funds rate to decrease real GDP but not potential GDP.
C) raises the federal funds rate to decrease real GDP but not potential GDP.
D) lowers the federal funds rate to increase potential GDP but not real GDP.
E) raises the federal funds rate to decrease both real GDP and potential GDP.
C
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A spot contract is a(n):
a. promise to purchase a foreign currency in 30 days. b. promise to purchase a foreign currency in 90 days. c. contract for the immediate exchange of currencies. d. agreement to sell currencies at a fixed price indefinitely.
The amount of money that someone would pay today for the right to receive a future payment is called
a. the present value of the future payment b. the determinate value of the future payment c. the interest rate d. the principal e. the time discount