Suppose commodity demand is stronger than expected, and money demand is stable
If the Fed is targeting the interest rate, it notices the rate is ________ its target, and action to correct this, shifting the LM curve to the ________, causes GDP to ________ natural GDP. A) below, right, fall back toward
B) below, right, rise further toward
C) below, left, rise further from
D) above, left, fall back from
E) above, right, rise further from
E
You might also like to view...
Given an upward-sloping aggregate supply curve, attempts to reduce unemployment through monetary policy will aggravate current inflation as illustrated by a:
A. Leftward shift of aggregate demand. B. Rightward shift of aggregate demand. C. Leftward shift of aggregate supply. D. Rightward shift of aggregate supply.
Comparing a perfectly competitive market to a single-price monopoly with the same costs, we see that
A) both markets are equally efficient in their use of resources. B) the monopoly market always is more efficient in the use of resources. C) the perfectly competitive market achieves efficiency in resource use while the monopoly market does not. D) the monopoly market achieves efficiency in resource use while perfectly competitive market does not. E) None of the above answers is correct because comparing a perfectly competitive market to a monopoly is impossible.