The policy mix of a contractionary fiscal policy and a contractionary monetary policy would cause output to ________, and interest rates to ________.
A) decrease; increase, decrease, or remain unchanged
B) decrease; decrease
C) decrease; increase
D) increase, decrease, or remain unchanged; decrease
Answer: A) decrease; increase, decrease, or remain unchanged
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In the short run, if the Fed wants to raise the federal funds rate, it
A) instructs large commercial banks to sell government securities in the open market. B) instructs the New York Fed to buy government securities in the open market. C) instructs the New York Fed to sell government securities in the foreign exchange market. D) instructs the New York Fed to sell government securities in the open market. E) tells large commercial banks to raise their interest rates.
The marginal wage is measured by
A. The change in total wages paid divided by the change in the quantity of labor employed. B. Total wages paid divided by the quantity of labor employed. C. The change in total wages paid divided by the change in the quantity of output produced. D. The percentage change in wages divided by the percentage change in the quantity of labor employed.
A $1,000 face value bond, with an annual coupon of $40, one year to maturity and a purchase price of $980 has a:
A. A current yield that equals 4.08% and a yield to maturity that equals 4.0%. B. current yield that equals 4.00%. C. current yield that equals 4.08% and a yield to maturity that equals 6.12%. D. coupon rate that equals 4.08%.
In 1993 the federal government boosted income tax rates. In the seven years that followed:
A. tax revenues fell slightly. B. productivity growth slowed. C. the unemployment rate increased. D. tax revenues expanded rapidly.