Suppose the government of South Island fixes the exchange rate of its currency, the Islandia, in terms of the U.S. dollar. Initially the exchange rate is set at $1 per Islandia. Later the government changes the exchange rate to $2 per Islandia. This is an example of a(n):

When the Fed attempts to increase real GDP and employment by ________ its target for the federal funds rate, it is conducting ________ monetary policy

A) raising; expansionary B) raising; contractionary C) lowering; expansionary D) lowering; contractionary

A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

A) better suited for the production of some goods than others. B) used efficiently. C) relatively cheap at low levels of output. D) used to produce consumption goods.