The equilibrium output level in the country of Plutonia is $40 billion, while its potential output is $60 billion. Suppose the central bank of the country implements an expansionary monetary policy. This is likely to lead to _____
a. an expansionary gap
b. a liquidity trap
c. disinflation
d. inflation
d
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The phenomenon of equipment or structure going through "wear and tear" and eventually becoming obsolete is referred to as:
A) depreciation. B) capital tear. C) intertemporal loss. D) creative destruction.
perfectly competitive firm with a random demand has an expected demand curve that is ________ its expected marginal revenue curve.
A) equal to B) exactly double C) less than D) greater than
When inflation begins to rise, people can prevent their wealth from deteriorating by doing all of the following except
A) holding more cash. B) converting their cash into foreign currencies. C) spending their cash on goods and services. D) investing in financial instruments such as stocks or precious metals.
What is quantitative easing? What was the Fed's objective in implementing quantitative easing?
What will be an ideal response?