At __________ income levels on the LM curve, the interest rate must be __________

A) higher; lower
B) lower; higher
C) higher; unchanged
D) higher; higher


D

Economics

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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.

A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease

Economics

Refer to Figure 3-1. If the product represented is an inferior good, a decrease in income would be represented by a movement from

A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.

Economics

According to the rational expectations hypothesis, monetary policy can have real effects on such variables as real Gross Domestic Product (GDP) in the short run

A) only when the policy is anticipated. B) only when the policy is unsystematic and unanticipated. C) regardless of whether the policy is anticipated or unanticipated. D) when the Federal Reserve's open market committee operates as expected in either buying or selling bonds.

Economics

Society's core economic problem is

a. the role of government in the economy b. a scarcity of land, labor, and machinery to produce goods and services c. the federal budget deficit d. an unequal distribution of income e. low living standards

Economics