Suppose the economy has a recessionary gap. By using an expansionary monetary policy, the Fed can
A) raise real GDP without increasing the price level.
B) raise real GDP and the price level.
C) raise real GDP and decrease the price level.
D) raise the price level alone, but cannot increase real GDP.
B
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Compared to people in other nations, people in the United States pay
A. much higher taxes. B. somewhat higher taxes, on average. C. about the same amount taxes. D. lower taxes.
Wealth consists ultimately of
A) gold. B) land. C) money. D) whatever people value.
In 1913, Congress established the Federal Reserve system with the intention of putting an end to
A) high unemployment rates. B) bank panics. C) high interest rates. D) inflation.
When investors invest in something simply because everyone else is doing it, they are:
A. suspect to "tulip mania." B. following a "herd instinct." C. acting objectively on full information available in the market. D. leveraging market performance for their own gain.