Expansionary monetary policy during periods of underutilized resources can cause
A. real Gross Domestic Product (GDP) to increase with an increase in the price level.
B. real Gross Domestic Product (GDP) to increase with a decrease in the price level.
C. real Gross Domestic Product (GDP) to increase without an increase in the price level.
D. nominal Gross Domestic Product (GDP) to increase but cannot affect real Gross Domestic Product (GDP).
Answer: A
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A decrease in autonomous investment of $100 that occurs when the marginal propensity to save (MPS) equals 0.25 will lead to a decrease in real Gross Domestic Product (GDP) of
A) $800. B) $25. C) $400. D) $100.
What might an "anti-inflation hawk" do so that good macroeconomic performance is likely to continue under his or her successors as head of the central bank?
What will be an ideal response?
If insurance companies knew how risk-averse their customers were:
A. diversification would not occur. B. risk pooling would not occur. C. policies would be perfectly diversified, resulting in lower premiums for everyone. D. adverse selection would not occur.
Compared to the 1960 and 1973 period, average real earnings of workers ________ from 1973 to 1995 and then ________ from 2007 to 2016.
A. grew; grew at about the same rate B. declined; slowed again C. grew more rapidly; declined D. declined; grew