A country is likely to have a higher sacrifice ratio if
a. contracts are shorter, and people believe the central bank will reduce inflation.
b. contracts are longer, and people believe the central bank will not reduce inflation
c. contracts are longer, and people believe the central bank will reduce inflation.
d. contracts are shorter, and people believe the central bank will not reduce inflation.
b
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Other things being equal, when the Fed buys U.S. government securities
A) the quantity of paper currency and coins in circulation expands by more than the amount of the Fed's purchase. B) the Fed's total assets and total liabilities immediately expand by exactly the amount of the Fed's purchase. C) the U.S. Treasury must immediately issue new securities to replace the securities that the Fed has removed from the market. D) the quantity of deposits in the U.S. banking system expands by less than the amount of the Fed's purchase.
An increase in the expected profitability of investment will cause
A) IS to shift right. B) IS to shift left. C) MP to shift upward. D) MP to shift downward.