When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline
B. increase; raise; decline
C. decline; lower; expand
D. decline; raise; decline
Answer: C
You might also like to view...
Which of the following statements about the Herfindahl-Hirschman Index is CORRECT?
I. It is the square of the percentage market share of each firm summed over the largest 50 firms (or summed over all the firms if there are fewer than 50 ) in a market. II. A small index is indicative of a high degree of competition. III. The index is used to measure the degree of competition. A) I only B) I, II only C) I, III only D) I, II, and III
In what sense does the IMF act as a lender of last resort? How might the IMF's actions during the Mexican crisis of the mid-1990s have contributed to the Asian currency crisis a few years later?
What will be an ideal response?
An overall decline in communication and transportation costs have facilitated global interactions in the twentieth and the twenty first century
a. True b. False Indicate whether the statement is true or false
In Figure 9.5, a movement from Point A to Point B would result from
A. An increase in disposable income. B. An improvement in expectations for future sales. C. An increase in the interest rate. D. A decrease in wage costs.