If the Federal Reserve increases the federal funds rate dramatically, which of the following would we expect to happen?
A. People with adjustable-rate mortgages would be better off.
B. The amount of credit card borrowing would increase.
C. The price of houses would increase.
D. The price of cars would decrease.
Answer: D
Economics
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Define market equilibrium. How is the equilibrium price determined?
Economics
Suppose that during the Great Depression long-run aggregate supply shifted left. To be consistent with what happened to the price level and output, what would have had to happen to aggregate demand?
a. It would have to have shifted left by less than aggregate supply. b. It would have to have shifted left by more than aggregate supply. c. It would have to have shifted right by less than aggregate supply. d. It would have to have shifted right by more than aggregate supply.
Economics