When the Fed decreases the money supply, we expect
a. interest rates and stock prices to rise.
b. interest rates and stock prices to fall.
c. interest rates to rise and stock prices to fall.
d. interest rates to fall and stock prices to rise.
c
Economics
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In the monetary small open-economy model, a flexible exchange rate insulates the domestic price level from
A) both real and nominal shocks from abroad. B) real shocks from abroad, but not from nominal shocks from abroad. C) nominal shocks from abroad, but not from real shocks from abroad. D) neither real nor nominal shocks from abroad.
Economics
Suppose the short-run production function is q = 10 ? L. If the wage rate is $10 per unit of labor, then AVC equals
A) q. B) q/10. C) 10/q. D) 1.
Economics