Suppose the economy currently has an inflationary gap. The Fed engages in contractionary monetary policy. The impact of contractionary monetary policy will be to
A) increase short-run aggregate supply, decrease in prices and decrease in real GDP.
B) increase short-run aggregate supply, decrease prices and increase real GDP.
C) decrease aggregate demand, decrease prices, and increase real GDP.
D) decrease aggregate demand, decrease prices, and decrease real GDP.
D
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For society as a whole, the optimal amount of pollution control exists when: a. the marginal cost of pollution reduction is equal to the marginal benefit of the pollution reduction. b. firms are allowed to produce as much pollution as necessary to make the goods people want. c. the marginal costs of pollution clean up exceed the benefits
d. no pollution is permitted at all.
If the firm were a perfect competitor in the long run, what price would it charge?
Scarcity results when available resources cannot satisfy all desired uses of those resources.
Answer the following statement true (T) or false (F)
Based on your understanding of your roommate's preferences, you predict that he will select the spaghetti for his lunch at the cafeteria, but instead he chooses the gyros. How do you describe this event in terms of economic theory?
A. Your roommate is irrational. B. You roommate does not know his own preferences as well as you do. C. You constructed a model that made a prediction, and the prediction was refuted. D. Your roommate does not know what is in his own best interests.