Investment is _________ related to the interest rate, and NCO is __________ related to the interest rate.
A. negatively; negatively
B. negatively; positively
C. positively; positively
D. positively; negatively
A. negatively; negatively
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To cut inventories, firms produce ________ and real GDP ________, which ________ people's incomes
A) less; rises; lowers B) less; falls; lowers C) less; rises; raises D) more; falls; lowers E) more; rises; raises
Monetary policy credibility has the benefit of ________
A) stabilizing inflation in the short run when faced with positive demand shocks B) stabilizing economic activity in the short run when faced with positive demand shocks C) transmitting the effect of aggregate demand shocks onto short-run aggregate supply D) enhancing the job opportunities of Federal Reserve officials after they leave the central bank
Two goods are considered substitutes only if a(n)
a. decrease in the demand for one leads to a decrease in the supply of the other b. increase in the demand for one leads to a decrease in the supply of the other c. increase in the price of one leads to an increase in the demand for the other d. decrease in the price of one leads to an increase in the demand for the other e. decrease in the supply of one leads producers to switch to production of the other
The Self-Correction view believes that in a recession_____.
A. there are forces in the markets that automatically move the economy back to full employment B. the government should encourage business spending on research and development C. the economy could be below full employment for long periods of time D. only monetary policy can effectively restore full employment