If the Fed carries out an open market operation and buys U.S. government securities, the federal funds rate ________ and the quantity of reserves ________
A) rises; increases
B) falls; increases
C) rises; decreases
D) falls; decreases
E) rises; does not change
B
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In the Solow model, the faster growth of output that results from an increase in the saving rate is temporary, because ________
A) of diminishing marginal product of capital B) with a larger stock of capital, consumption is encouraged more than investment C) the rising capital stock depreciates at a faster rate D) the economy settles into a steady state in which saving no longer rises
The actual rate of inflation is equal to the expected rate of inflation along the:
a. downward-sloping Phillips curve. b. upward-sloping aggregate supply curve. c. horizontal aggregate supply curve. d. downward-sloping aggregate demand curve. e. vertical Phillips curve.