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
You might also like to view...
All of the following will shift the short-run aggregate supply (SRAS) curve EXCEPT
A) a change in the price of labor. B) technological progress. C) a change in the price of a needed raw material. D) a change in the price level.
Can nominal GDP ever be less than real GDP?
What will be an ideal response?
Which of the following countries is not a member of the European Union?
A) Portugal B) Switzerland C) Slovakia D) Malta
If all of the following examples are elastic, which one will most likely have an increase of revenue?
a. The price of shower curtains rises. b. The price of cell phones falls. c. The price of raspberries remains constant. d. The quantity supplied of skin moisturizer remains constant.