Gain from trade is the increase in total production due to specialization allowed by trade.

The Fed buys $50,000 of government securities. The desired reserve ratio is 10 percent and the currency drain ratio is zero. What will be the change in the quantity of money?

A) $0 B) $5,000 C) $50,000 D) $5,000,000 E) $500,000

If the Fed lowers the inflation rate and initially expected inflation does not change, in the short run the unemployment rate ________, and in the long run the unemployment rate ________ the natural unemployment rate

A) does not change; is greater than B) rises; is greater than C) falls; is equal to D) rises; is equal to E) does not change; is equal to