To eliminate an inflationary gap, the expenditure schedule should
a. shift upward.
b. shift downward.
c. become flatter.
d. become steeper.
b
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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
In the table above, the unemployment rate is
A) 12 percent. B) 10 percent. C) 8 percent. D) 6 percent. E) 11 percent.
Which of the following is NOT likely to affect investment?
A) variations in expected output B) the nominal interest rate C) the real interest rate D) the tax treatment of depreciation allowances
The required reserve ratio is required reserves stated as a percentage of checkable deposits
a. True b. False Indicate whether the statement is true or false