Assume a central bank follows a rule that requires it to take steps to keep the price level constant. If the price level fell because of a decrease in aggregate demand and an increase in aggregate supply that kept output unchanged, then
a. the central bank would have to raise interest rates which would decrease output.
b. the central bank would have to raise interest rates which would increase output.
c. the central bank would have to reduce interest rates which would decrease output.
d. the central bank would have to reduce interest rates which would increase output.
d
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The following figure introduces the relationship between industrial production and wholesale price index changes between the years 1929-1935. What is the purpose of the following figure?
What will be an ideal response?
An exogenous increase in the country's trade balance shifts the
a. IS schedule to the left. b. IS schedule to the right. c. LM schedule to the left. d. LM schedule to the right.
A recent purchaser of a bond that agrees to pay an annual nominal amount would hope that interest rates do not rise
Indicate whether the statement is true or false
What factors contribute to the high level of productivity of the American worker?
What will be an ideal response?