Assume the economy is initially in equilibrium where potential GDP is less than real GDP
If the expected inflation rate, the term structure effect, and the default-risk premium are constant, ________ in the Fed's target short-term nominal interest rate will shift up the MP curve which will result in real GDP ________. A) an increase; falling
B) an increase; rising
C) a decrease; falling
D) a decrease; rising
B
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Define the following terms and explain their importance to the study of economics. a. common stock b. corporation c. limited liability d. plowback
What will be an ideal response?
Which of the following would be primarily determined in factor markets? a. The number of computers produced
b. The wage rates for high school teachers. c. The price of automobiles. d. Sales tax revenues.
If the CPI equaled 1.43 in 2008 and 1.56 in 2009, then between 2008 and 2009 there was:
A. deflation. B. a recession. C. an expansion. D. inflation.
Jim’s Limited Leather dumps its tanning chemicals into a creek that it claims to own. Jim’s only neighbor, Mr. Glover, claims he owns the creek, and the chemicals are killing his fish. Why would it be impractical to apply the Coase theorem to find a workable solution in this case?
a. There are too many transactors. b. There is no externality. c. Property rights are uncertain. d. Leather is a private good.