All of the following help provide the basis for the Fed controlling the real interest rate in the IS-MP model EXCEPT
A) the Fed controls the federal funds rate through open market operations.
B) if expected future inflation remains stable, changes in nominal interest rates reflect changes in real interest rates.
C) short-term and long-term interest rates tend to move together.
D) the Fed's increased use of TIPS in conducting monetary policy.
D
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A decrease in the supply of labor will ________ real wages and ________ employment
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Why is a family hiring a lawn-care service part of the product market?
a. The mowing firm is presumably owned by a household that purchases products. b. The lawn care firm must purchase products in order to complete the job. c. The mowing firm is providing a product to a household in the form of a service. d. The lawn care firm is providing capital to households by paying its workers’ wages.