In periods of restrictive monetary policy, which of the following industries are likely to feel a disproportionately large impact of the policy?
A. The auto industry.
B. Soft drink companies such as Coke and Pepsi.
C. Cell phone service providers.
D. Fast-food restaurants.
Answer: A
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Suppose China decides to sell a vast majority of their large holdings of U.S. Treasury bonds. If you are thinking of refinancing your house, how would China's action affect your decision to refinance?
A) You would want to wait to refinance as interest rates should rise. B) China's actions should not affect your decision to refinance in any way. C) You would want to refinance as soon as possible as interest rates should rise. D) You would want to wait to refinance as interest rates should fall.
According to the Keynesian model, an increase in autonomous investment leads to
A) a more than proportional decrease in real Gross Domestic Product (GDP). B) a less than proportional decrease in real Gross Domestic Product (GDP). C) a proportional increase in real Gross Domestic Product (GDP). D) a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP).