When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline
B. increase; raise; decline
C. decline; lower; expand
D. decline; raise; decline
Answer: C
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When demand falls and supply stays the same, equilibrium price ______ and equilibrium quantity ________.
Fill in the blank(s) with the appropriate word(s).
QN=74 (17772) When economists talk about growth in the economy, they measure that growth as the
a. absolute change in nominal GDP from one period to another. b. percentage change in nominal GDP from one period to another. c. absolute change in real GDP from one period to another. d. percentage change in real GDP from one period to another.
Conservative economists believe that the crowding-out effect
A. is large because consumption demand is insensitive to interest rate changes. B. is not significant because the investment demand curve is interest insensitive. C. does not reduce the power of fiscal policy policies. D. greatly reduces the power of fiscal policy policies.
Government attempts to prohibit monopolization of a market are known as
a. antitrust regulation b. economic regulation c. social regulation d. anticompetitive regulation e. Herfindahl regulation