If the economy is experiencing high rates of inflation due to a new housing bubble, what effects would expansionary monetary policy have on the economy?
A) It would reduce inflation as well as unemployment.
B) It would raise inflation as well as unemployment.
C) It would reduce inflation but cause unemployment to rise.
D) It would raise inflation but would cause unemployment to fall.
Ans: C) It would reduce inflation but cause unemployment to rise.
You might also like to view...
Which of the following result from a change in the money supply brought about by an open market sale?
A) lower interest rate, higher exchange rate, decreased demand for investment and net exports B) higher interest rate, higher exchange rate, decreased demand for investment and decreased demand for net exports C) lower interest rate, lower exchange rate, increased demand for investment and net exports D) higher interest rate, lower exchange rate, decreased demand for investment and increased demand for net exports
Which of the following would be most likely to contribute to the breakdown of a cartel in a natural resource (e.g., bauxite) market?
a. high prices b. low price elasticity of demand c. high compatibility of member interests d. significant barriers to entry e. unequal member ownership of the natural resources