When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
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a. True b. False Indicate whether the statement is true or false
Suppose an increase in interest rates causes rising unemployment and falling output. To counter this, the Federal Reserve would
a. increase government spending. b. increase the money supply. c. decrease government spending. d. decrease the money supply.
In his book The Other Path, de Soto suggests that countries will grow more quickly if governments limit entrepreneurship.
Answer the following statement true (T) or false (F)
If Marlowe obtains 9 units of utility per dollar spent on apples and 6 units of utility per dollar spent on oranges, then Marlowe
A) is maximizing total utility. B) should buy more apples and fewer oranges. C) should buy more oranges and fewer apples. D) should buy fewer oranges and fewer apples.