The restrictive monetary policy followed by the Fed in the early 1980s
a. reduced both unemployment and inflation.
b. reduced inflation significantly, but at the cost of a severe recession.
c. reduced unemployment significantly, but at the cost of higher inflation.
d. raised both unemployment and inflation.
b
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If the actual capital-labor ratio is above the steady-state capital labor ratio, growth from convergence will be ________, and the economy will grow ________ than it will along a balanced growth path
A) negative; slower B) negative; faster C) positive; slower D) positive; faster
The crowding-in effect results from
a. a low MPS. b. induced investment. c. induced consumption. d. rising interest rates.
An inflationary gap is the amount by which aggregate expenditures ____ the amount required to achieve full-employment equilibrium GDP.
A. exceed B. equal C. fall short of D. are greater than
The number of people that are laid off in a month is
A. a stock. B. a flow. C. both a stock and a flow. D. neither a stock nor a flow.