If a point lies on the monetary policy reaction curve, and at this point the inflation rate equals the target rate of inflation, we know that:
A. the real interest rate corresponding to this point is below the long-run real interest rate.
B. current output is above potential output.
C. the real interest rate corresponding to this point is equal to the long-run real interest rate.
D. the real interest rate corresponding to this point is above the long-run real interest rate.
Answer: C
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With labor migration, the country of origin experiences:
A. An increase in output and a rising wage rate B. An increase in output and a falling wage rate C. A decrease in output and a falling wage rate D. A decrease in output and a rising wage rate
Bank reserves include
A) vault cash and deposits with the Federal Reserve. B) loans to bank customers and deposits with the Federal Reserve. C) vault cash and loans to bank customers. D) customer checking accounts and vault cash.
The larger the MPC: a. the smaller the multiplier
b. the smaller the effect of a given increase in government purchases on consumption purchases. c. the larger the effect of business taxes which reduce investment on aggregate demand. d. the less powerful changes in individual taxes will be in changing aggregate demand.
In a centrally planned economic system, who decides what and how much will be produced?
A. Consumers B. Privately owned businesses C. The government D. The people, by referendum every five years