An autonomous monetary policy easing temporarily ________ real interest rates and ________ aggregate output in the short run, but in the long run real interest rates and aggregate output return to the equilibrium levels
A) reduces; raises
B) reduces; lowers
C) increases; lowers
D) increases; raises
A
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Refer to Figure a. If ? (the probability of state S) decreases, the x-intercept for the solid constant expected consumption line:
A. increases.
B. decreases.
C. does not change.
D. The answer cannot be determined without more information.
Game theory is based on the idea that
a. government determines the rules of the game b. firms are strategically independent c. firms are price takers d. a player's strategy must take account of the strategies followed by other players e. a player's strategy must be independent of the strategies followed by other players
Consider a consumer choosing between spending her money on food, F, or clothing, C. Assume that a unit of food and a unit of clothing have the same price, and that the consumer can afford a total of 20 units of either food or clothing. If B stands for benefits then "B(F) + B(C)" is the:
A. constraint. B. objective function. C. optimization problem. D. sunk cost.
When the interest rate increases, the cost of financing investments ______ and _____ investment projects will be undertaken.
a) increases; more b) increases; fewer c) decreases; more d) decreases; fewer