c211 OA Prep 2 (100% Errorless Answers)

When the Fed buys government bonds in open-market operations, correct answers it increases the money supply and expands aggregate demand When the Fed sells government bonds in open-market operations, correct answers it decreases the money supply and contracts aggregate demand. For any given money supply, fluctuations in money demand lead to fluctuations in correct answers interest rates, aggregate demand, and output Changes in monetary policy aimed at expanding aggregate demand can be described either as correct answers increasing the money supply or as lowering the interest rate. Changes in monetary policy aimed at contracting aggregate demand can be described either as correct answers decreasing the money supply or as raising the interest rate. Suppose the world price is below the before-trade domestic price for a good. If a country allows free trade in this good, correct answers consumers will gain and producers will lose When a country allows trade and exports a good, correct answers domestic producers are better off, domestic consumers are worse off, and the nation is better off because the gains of the winners exceed the losses of the losers. Which of the following statements about a tariff is true? correct answers A tariff increases producer surplus, decreases consumer surplus, increases revenue to the government, and reduces total surplus. Which of the following statements about import quotas is true? correct answers For every tariff, there is an import quota that could have generated a similar result. Because producers are better able to organize than consumers are, we would expect there to be political pressure to create correct answers import restrictions. An example of a transfer payment is correct answers unemployment benefits If nominal GDP in 2019 exceeds nominal GDP in 2018, then the production of output must have correct answers risen or fallen because there is not enough information to determine what happened to real output. If a cobbler buys leather for $100 and thread for $50 and uses them to produce and sell $500 worth of shoes to consumers, the contribution to GDP is correct answers $500. Real GDP is measured in ______ prices while nominal GDP is measured in ______ prices. correct answers base year; current year