When the Federal Reserve reduces its target rate of inflation, it will set a ________ real interest rate at every inflation rate and the aggregate demand curve will ________.
A. lower; shift to the right
B. higher; shift to the left
C. lower; shift to the left
D. higher; shift to the right
Answer: B
You might also like to view...
Economists refer to a holdout as someone who refuses to produce a pure public good with private funds
Indicate whether the statement is true or false
On a certain supply curve, one point is (quantity supplied = 200, price = $2.00) and another point is (quantity supplied = 250, price = $2.50). Using the midpoint method, the price elasticity of supply is about
a. 0.2. b. 0.5. c. 1.0. d. 2.5.
Classical macroeconomists assert that "saving" is the same as "not spending at all"
Indicate whether the statement is true or false
Which of the following changes shifts the SRAS curve down?
A. A decrease in firms' costs B. A decrease in government purchases C. An increase in the labor force D. An increase in the money supply