In a binding situation, the Fed rule calls for
A. a negative output level.
B. a positive interest rate.
C. a negative price level.
D. a negative interest rate.
Answer: D
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A minimum wage set above the market equilibrium wage rate ______
A. increases both employment and the quantity of labor supplied B. decreases unemployment and raises the wage rate of those employed C. raises the wage rate of those employed and increases the supply of jobs D. increases unemployment and decreases employment
There is a significant positive relationship between ________ and __________
a. natural resource commodity exports, high levels of per capita GDP b. investment in capital, high levels of per capita GDP c. high levels of illiteracy, high levels of per capita GDP d. limited government recognition of land tenure and property ownership, high levels of per capita GDP
The diminished employment prospects for the graduates of 2002 is most likely due to the existence of a(n)
a. inflationary gap. b. significant increase in real GDP. c. shift of the aggregate demand curve outward. d. recessionary gap.
How does a recession impact the financial markets?
A. It increases stock prices. B. It increases loanable funds. C. It decreases loanable funds. D. It decreases risk.