If the Fed increases the quantity of money, in the short run the ...

[Metfan725]

If the Fed increases the quantity of money, in the short run the ________ and in the long run the ________.
 
  A) nominal interest rate falls; the price level falls
  B) nominal interest rate falls; the price level rises
  C) price level rises; the nominal interest rate falls
  D) nominal interest rate rises; the price level falls
  E) nominal interest rate rises; the price level rises

Question 2

Why does scarcity lead to the what, how, and for whom questions?
 
  What will be an ideal response?

[aidanmbrowne]

Answer to Question 1

B

Answer to Question 2

Human wants exceed the resources available to satisfy them, thereby creating the problem of scarcity of goods and services. Everyone wants more than he or she can have, be it a student dreaming of a faster computer or an extraordinarily rich business leader wishing for more vacation time. Because not all wants can be satisfied, people must make choices about which wants to satisfy. The choices resulting from scarcity mean that people must decide what gets produced, how are the products produced, and for whom are the products produced.

[Metfan725]

Excellent

[smrtceo]

Gracias!