Olivia must decide whether or not to go to college. She can either continue to work as a waitress and earn $22,000 per year or she can go to school and expect to earn $32,000 per year when she finishes. She should
a. continue to work as a waitress.
b. go to school, but only if she knows she can finish in four years.
c. go to school no matter what.
d. we cannot tell since there may be important nonmonetary considerations that Olivia will take into account.
D
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In the short run, when the Fed increases the federal funds rate,
A) the real interest rate rises and investment does not change. B) the real interest rate is unaffected but investment still decreases. C) the real interest rate rises and investment decreases. D) there is no effect on investment because investment depends on the real interest rate. E) the real interest rate falls and investment increases.
Which of the following would likely take the longest time to enact?
A) Federal government fiscal policy that strives for a balanced budget B) The Fed's lowering of the discount rate C) The Fed's raising of the discount rate D) The Fed's engagement in open market operations