In a world of rational expectations,
A) an anticipated increase in money supply leads immediately to higher nominal interest rates.
B) an anticipated increase in money supply leads immediately to lower nominal interest rates.
C) an unanticipated increase in money supply leads immediately to higher nominal interest rates.
D) an unanticipated decrease in money supply leads immediately to lower nominal interest rates.
A
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The figure above shows the U.S. supply of labor curve. What was the effect of the decline in birth rates during the 1960s and 1970s on the supply of labor curve in the 1980s?
A) a leftward shift of the supply of labor curve B) a rightward shift of the supply of labor curve C) a movement downward along the supply of labor curve from a point such as A to a point such as B D) The supply of labor curve became steeper. E) None of the above answers is correct because there was no change in the supply of labor curve.
In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. The rent ceiling leads to a
A) shortage of 1000 apartments. B) shortage of 2000 apartments. C) surplus of 1000 apartments. D) surplus of 2000 apartments.