Answer the following statements true (T) or false (F)
1) An expansionary monetary policy is one that reduces the supply of money.
2) Changes in the interest rate are more likely to affect investment spending than consumer
spending.
3) The job of the Fed in limiting the supply of money may be made more complex if commercial
banks initially have substantial excess reserves.
4) When QE2 and Operation Twist were implemented, the Fed suspended its policy of forward
commitment.
1) F
2) T
3) T
4) F
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The implicit price deflator is given by the formula
A. nominal GDP in current period ÷ nominal GDP in base period. B. nominal GDP in current period ÷ real GDP in base period. C. nominal GDP ÷ real GDP. D. real GDP ÷ nominal GDP.
Farmers receive a relative large amount of transfers per capita because _____
a. farming is in decline b. there are more farmers than any other interest group c. agriculture is a national priority d. farming is the dominant industry in most rural Congressional districts