Banks are prohibited from holding __________ in their portfolio of assets

If wages and prices adjust slowly, we would expect expansionary monetary policy to be

A) more likely to result in a vertical short-run Phillips curve. B) less likely to reduce the natural unemployment rate. C) more likely to reduce inflation. D) more likely to affect the unemployment rate.

If demand is perfectly elastic

A) then a 1% increase in price leads to a fall in quantity of greater than 1%. B) then a 1% increase in price leads to a fall in quantity of less than 1%. C) then a 1% increase in price causes quantity demanded to fall to zero. D) then a 1% increase in price has no effect on quantity demanded.