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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Holding other factors constant, if food prices decline relative to the prices of other products, then the real wages of agricultural workers will ________ and employment of agricultural workers will ________.
A. increase; increase B. decrease; not change C. increase; decrease D. decrease; decrease
Which of the following would be included in the calculation of Gross Domestic Product (GDP)?
A) the value of spending on new machinery and equipment B) the value of the sale of 1,000 shares of IBM stock C) the value of transfer payments D) the value of the sale of a used guitar
The Montreal Protocol is expected to save the ozone layer
Indicate whether the statement is true or false
When a country runs a trade surplus, it will:
A. borrow from foreign countries or sell assets to them. B. borrow from foreign countries or buy assets from them. C. lend to foreign countries or buy assets from them. D. lend to foreign countries or sell assets to them.