If there is a leftward shift of the money demand curve, which of the following should the Fed do if it wants to keep the price level stable?
a. Lower its interest rate target
b. Sell bonds in the open market
c. Wait, since the price level does not usually change when the money demand curve shifts
d. Raise its interest rate target
e. Buy bonds in the open market
B
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Assume the supply function for good X can be written as Qs = -100 + 27Px - 5Py - 1.8W where Px = the price of X, Py = the price of good Y, and W = Wage index for workers in industry X
This equation implies that X and Y are substitutes in production. Indicate whether the statement is true or false
. When you are faced with a lack of information concerning a purchase, you should
A. consider the opportunity cost of gaining more information. B. always seek out the most information you can before making a purchase. C. not make the purchase without complete information. D. None of these statements is true.