When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
Economics
You might also like to view...
What characterizes a competitive equilibrium?
A) Markets are rationed. B) Governments stay out of the market. C) Economic agents are price-takers. D) It is costly to experiment with policies.
Economics
If a $1 increase in price leads to a $1 decrease in total revenue, then demand must be elastic
Indicate whether the statement is true or false
Economics
If policy makers decide to decrease the inflation rate very slowly, it is referred to as ______.
a. indexing b. going cold turkey c. de-escalation d. gradualism
Economics
An excellent example of price leadership can be found in
A. automobiles. B. oil. C. banking. D. cigarettes.
Economics