Monetary policy designed to offset an inflationary gap would:
a. Increase interest rates and increase aggregate demand.
b. Increase interest rates and decrease aggregate demand.
c. Decrease interest rates and increase aggregate demand
d. Decrease interest rates and decrease aggregate demand.
b
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If the Federal Reserve raises the U.S. interest rate, foreigners'
A) demand for U.S. dollars will increase and the exchange rate will rise. B) demand for U.S. dollars will decrease and the exchange rate will fall. C) demand for U.S. dollars will increase and the exchange rate will fall. D) demand for U.S. dollars will decrease and the exchange rate will rise.
Which of the following is characteristic of a perfectly competitive market?
a. There is free entry into and exit from the market. b. Individual firms can exert a perceptible influence on the market price. c. The firms in the market produce differentiated products. d. All of these are true.