Refer to the scenario above. Which of the following shifts will increase the total cost?

Of the four effects on interest rates from an increase in the money supply, the one that works in the opposite direction of the other three is the

A) liquidity effect. B) income effect. C) price level effect. D) expected inflation effect.

The Federal Reserve often begins to tighten monetary policy after a trough in the business cycle because of

A) the impact lag. B) the recognition lag. C) bureaucratic indecision. D) the time necessary to get Congress to act.