An example of a microeconomic decision is a situation in which
A) the Federal Reserve considers how much to increase the money supply during the coming month in an effort to constrain the rate of inflation.
B) Congress and the president seek to reach a compromise on how much to increase government spending in an effort to influence national expenditures.
C) a firm evaluates how much to reduce the price of its product in an effort to influence sales and boost its profits.
D) the U.S. Treasury contemplates buying foreign currencies in an effort to influence exchange rates with an aim to boosting demand for U.S. goods and services.
C
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If the demand for money was totally independent of the interest rate, the LM curve would ________ and monetary policy would ________
A) have a positive slope, quite powerful B) have a positive slope, impotent C) be vertical, quite powerful D) be vertical, impotent
The practice of "monetizing the debt" is traditionally feared because it is thought to cause
A) unemployment. B) inflation. C) a falling price level. D) a liquidity trap.