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
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Refer to the scenario above. If Aqua Inc charges a price of $20 for each unit of Good A while Blu Corp . charges a price of $60, Blu Corp . will ________
A) face the entire market demand B) lose all its customers to Aqua Inc. C) face a demand of 2,000 units D) face a demand of 1,500 units
Which of the following is not an important difference between privately-owned enterprises and government institutions?
A) Decision makers confront different sets of incentives. B) Different kinds of information are available to decision makers. C) Government has the generally acknowledged right to use coercion. D) Self-seeking motives are less characteristic of government employees.
List and describe the sources of spending in the economy by focusing on the four major sectors of the economy
What will be an ideal response?
Diversification reduces
a. only market risk. b. only firm-specific risk. c. neither market or firm-specific risk. d. both market and firm-specific risk.