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
Answer: C
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There is no role for government in a free enterprise economy such as the United States.
Answer the following statement true (T) or false (F)
When the government conducts activist fiscal policy, what type of spending does it usually use?
A) net interest spending B) entitlement and mandatory spending C) strategic spending D) discretionary spending
The fundamental cause of monopolies is barriers to entry
a. True b. False Indicate whether the statement is true or false
Which of the following costs do not vary with the amount of output a firm produces?
a. average fixed costs b. fixed costs and average fixed costs c. marginal costs and average fixed costs d. fixed costs