If the Fed's monetary policy reaction function does not change, then when inflation decreases the Fed responds by ________ the real interest rate, which ________ consumption and investment spending, which ________ output.
A. increasing; increases; decreases
B. decreasing; decreases; decreases
C. increasing; decreases; decreases
D. decreasing; increases; increases
Answer: D
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Some laborers are productive, others are less so. How do we measure labor productivity? Why are there differences in labor productivity? a. Labor productivity is capital stock divided by labor, and differences may be explained by differences in the capital-labor ratio
b. Labor productivity is output divided by capital stock, and differences may be explained by differences in the capital-output ratio. c. Labor productivity is capital divided by GDP, and differences may be explained by differences in the capital-output ratio. d. Labor productivity is the change in labor divided by GDP, and differences may be explained by differences in the capital-output ratio. e. Labor productivity is GDP divided by labor, and differences may be explained by differences in the capital-labor ratio.
Which is most likely to cause a temporary spurt in the growth of GDP that cannot be maintained in the long run?
a. An unanticipated increase in aggregate demand. b. An anticipated increase in aggregate demand. c. An increase in long run aggregate supply (LRAS). d. An increase in wage rates
Based on geographical economic data, which person most likely avoided the housing boom after the 2001 recession?
a. Maggie, a teacher in Tennessee b. Sam, an attorney in Florida c. Louis, a writer in Massachusetts d. Pilar, a fashion consultant in New York
If a woman is out of the work force for 10 years while raising small children, she is legally entitled to
A. her old job back at what wage the current occupant of that job is making. B. nothing with regard to her previous job. C. her old job back at the wage she was making at the time. D. an entry level job with her old employer.