12) In the short run when prices don\'t have enough time to change, the Federal
ID: 1106076 • Letter: 1
Question
12) In the short run when prices don't have enough time to change, the Federal Reserve 1) can influence the level of interest rates in the economy 2) cannot influence the level of interest rates in the economy 3) can influence the level of interest rates in the economy but generally will not because it would be destabilizing 4) can only affect the amount of money in the economy 5) none of the above 13) Historically, economists have believed that, when the Federal Reserve lowers interest rates, investment spending and GDP 1) increases; decreases 2) increases; increases 3) decreases; decreases 4) decreases; increases 5) none of the above 4) Following the Crash of 2008 and the several rounds of Quantitative Easing by the Federal Reserve, the expectation in the question above has been 1) substantially stronger than expected 2) somewhat stronger than expected 3) about the same as expected 4) somewhat weaker than expected 5) substantially weaker than expected Which of the graphs below most closely depicts 20) a minimum output level, intended to alleviate a perceived shortage? 1 Graph E 2) Graph F 3 Graph G 4) Graph H 5 not enough information toExplanation / Answer
12) A. Change in money supply influences the interest rate
13)B. Decreasing interest rate will increase investment and increases aggregate demand
14)D. Substantialnweaker because people dont invest as interest rate decreases
15)C. Graph G intends to allevaite perceived shortage by setting minimum output.
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