Suppose that the economy is producing below potential GDP and the Fed implements the correct change in monetary policy, but not until after the economy has passed the trough of the recession. Then
A) the Fed's contractionary policy will result in too large of a decrease in GDP.
B) the Fed's expansionary policy will result in too large of an increase in GDP.
C) the Fed's expansionary policy will result in too small of a decrease in GDP.
D) the Fed's contractionary policy will result in too small of a decrease in GDP.
B
You might also like to view...
All externalities are detrimental
a. True b. False Indicate whether the statement is true or false
The demand for a factor of production will be more inelastic
a. when the cost of the factor is small relative to the total cost of the product. b. the more elastic the demand for the final product. c. the easier it is to substitute other resources for the factor. d. the more elastic the supply of products produced with the resource.
According to new trade theory, first movers in an industry can gain a scale-based _____ advantage that later entrants find almost impossible to match.
Fill in the blank(s) with the appropriate word(s).
A 10-year Treasury note as a face value of $1,000, price of $1,200, and a 7.5% coupon rate. Based on this information, we know the:
A. coupon payment on this bond is equal to $90. B. current yield is equal to 8.33%. C. present value is greater than its price. D. coupon payment on this bond is equal to $75.