When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
You might also like to view...
An example of an externality occurs when a chemical factory
A) is producing ethanol and dumps waste in a river upstream from a popular fishing spot. B) produces fertilizers that do not help plants grow. C) produces fertilizers that kill plants rather than feed them. D) overworks its employees.
Which of the following examples is NOT a negative stock externality?
A) Goodwill generated by a company B) Noise pollution from an airport C) Odors emitted from a paper mill D) None of these cases are examples of negative stock externalities
Economists object to monopolies on the grounds of efficiency. Why is this? Explain
Related to the Economics in Practice on page 274: According to the Economics in Practice, in industries such as electronics and computers, the patent policies of a country ________ when a company in that industry looks at different countries in which to locate its activities.
A. do not seem to make much difference B. are the only deciding factor C. must be among the most protective in the word D. are the primary deciding factor