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Assuming Flexible Prices, If the Federal Funds Rate Rises More

question 18

Multiple Choice

Assuming flexible prices, if the federal funds rate rises more than expected, then the shift to the _____ by AD will be _____ than the shift to the _____ by AS in the short run.


Definitions:

Labor-Force Participation Rate

The percentage of the working-age population that is in the labor force, including both employed and unemployed individuals.

Employed

The state of having paid work or being engaged in an activity or enterprise as a means of earning an income.

Labor-Force Participation Rate

The proportion of the adult population that is either employed or actively looking for employment.

Marginally Attached Workers

Individuals not currently in the labor force who have looked for work within the last year but not in the last four weeks, often due to temporary barriers.

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