Based on the diagram, if potential output equals 5,000 and the real interest rate is 5 percent, then there is ________ gap and the Fed must ________ the real interest rate so that output will equal potential output.
A. no output; not change
B. a recessionary; raise
C. a recessionary; reduce
D. an expansionary; raise
Answer: C
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State chartered banks were supposed to be driven out of business by the National Currency Act of 1863 and the National Banking Act of 1864 by
A) imposing a tax on their issuance of state bank notes. B) prohibiting them from having interstate branches. C) prohibiting them from paying interest on demand deposits. D) regulating the amount of interest they could pay on savings accounts.
A person is dynamically consistent if:
A. his preferences over the alternatives available at some future date change as the date approaches. B. his preferences over the alternatives available at some future date do not change as the date approaches. C. he does not always want to follow through on his plans and intentions. D. he has complete self-control with occasional lapses.
Trevor and Lynda bought a home in 2013 for $185,000 with a 20% down payment. Their mortgage payments were only applied to interest on the mortgage balance. In 2017, the couple sold their home for $148,000. What was the value of their equity?
a. 0 b. $37,000 c. $11,100 d. $18,500
Which of the following positions would a mercantilist support?
a. Trade in manufacturing goods is good for the US. b. Imports to the U.S. from Japan are beneficial to the U.S. c. Exports from Japan to the U.K. are beneficial to Japan. d. Movement of labor from UK to US is beneficial to US.