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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When a profit maximizing firm produces, they will be producing at that output at which marginal cost = marginal revenue
A. all of the time. B. some of the time. C. on rare occasions. D. none of the time.
Suppose the saving rate is greater than the golden rule saving rate (sG). First, explain what must happen to the saving rate in order to increase steady state consumption. Second, what are the advantages and disadvantages of this policy to increase steady state consumption
What will be an ideal response?
A demand curve with continuously changing slope over all quantity values will always have a price elasticity of demand equal to infinity.
Answer the following statement true (T) or false (F)
Online music streaming services, such as Spotify, have decimated the market for CDs. Based on this information, you can conclude that streaming services:
A. and CDs are complementary goods. B. has a higher price elasticity than CDs. C. and CDs are substitutes. D. has a higher income elasticity than CDs.