If we follow the laissez-faire prescription and allow wages, prices, and interest rates to vary in the economy, then which of the market self-adjustments below would help close a contractionary gap in the absence of government policy intervention?
a. Fall in product price
b. Increase in product price
c. Increase in interest rate
d. Fall in wage rate
a
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Equilibrium Interest Rate
The ________ that required separation of commercial and investment banking was repealed in 1999
A) the Federal Reserve Act. B) the Glass-Steagall Act. C) the Bank Holding Company Act. D) the Monetary Control Act.
Everything else held constant, a decrease in the excess reserves ratio causes the M1 money multiplier to ________ and the money supply to ________
A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease
Building a good reputation in the marketplace:
A. is not a significant value to a seller. B. is easy to fake. C. can take a long time to establish. D. All of these statements are true.