The democratic political process is weighted in a manner that favors
A) contractionary over expansionary fiscal and monetary policies because changes in aggregate demand tend to affect output before they affect the price level.
B) contractionary over expansionary fiscal and monetary policies because changes in aggregate demand tend to affect the price level before they affect output.
C) expansionary over contractionary policies because changes in aggregate demand tend to affect output before they affect the price level.
D) expansionary over contractionary policies because changes in aggregate demand tend to affect the price level before they affect output.
C
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Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production. What happens in the Australian wool market as a result of this announcement?
A) The quantity of Australian wool demanded increases in anticipation of higher prices in the future. B) The demand curve for Australian wool shifts to the left in anticipation of higher prices in the future. C) The quantity of Australian wool demanded decreases in anticipation of lower quantities in the future. D) The demand curve for Australian wool shifts to the right in anticipation of higher prices in the future.
In response to an unanticipated tightening of monetary policy, the Fed funds rate ________ at first, then ________ after 6 to 12 months
A) rises; returns most of the way to its original value B) falls; returns most of the way to its original value C) remains roughly unchanged; rises significantly D) remains roughly unchanged; falls significantly