When output is below potential and the policy rate has hit the floor of zero, if policymakers do nothing, output will ________ and inflation will ________
A) rise; fall
B) fall; fall
C) fall; rise
D) rise; rise
B
You might also like to view...
The endowment effect suggests that that people
A) are concerned about the welfare of others. B) act in ways to distort market prices. C) have a strong attachment to their entitlement, regardless of whether they paid to acquire it. D) have a strong sense of fairness.
How does proprietary trading expose investment banks to interest-rate and credit risk?
What will be an ideal response?
Which of the following is an example of the snob effect?
A) The fewer consumers that buy the operating system, the fewer the applications that will be available. B) The more people that buy a luxury watch, the less value consumers put on the watch. C) The fewer ATMs available in the city, the fewer consumers want to join the network. D) None of the above.
Which of the following might be an effect of advertising?
a. all of the following b. increased product differentiation c. increased total costs of production d. increased average total costs of production e. increased demand for the product