If a Central Bank Is Following a Policy of Fixing

question 77

Multiple Choice

If a central bank is following a policy of fixing an interest rate at a constant value, then, if the economy expands, the bank will respond by

• A) shifting the demand for money to the left.
• B) shifting the demand for money to the right.
• C) shifting the supply of money to the left.
• D) shifting the supply of money to the right.

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Definitions:

Minimum Wage

The lowest remuneration that employers can legally pay their workers, intended to protect employees from unduly low pay.

Demand For Labor

The total amount of workers that employers are willing and able to hire at a given wage rate, in a given period.

Union Shop

A workplace where employees are not required to join the union in order to be hired but must join soon after they begin employment.

Negotiates

The process of discussing something to reach an agreement, especially in business or diplomacy.