Monetary restraint is associated with all of the following except
A. A decrease in aggregate demand.
B. An increase in the reserve requirement.
C. A decrease in interest rates.
D. A decrease in the money supply.
Answer: C
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If the output gap equals -200 billion, then:
A. potential GDP is lower than actual GDP. B. there is no cyclical unemployment. C. cyclical unemployment equals the sum of structural and frictional unemployment. D. there is a recessionary gap.
An increase in the demand for labor will ________ wages and ________ employment
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
A monopsony is characterized as a market which has:
A. many buyers and one seller. B. one buyer and many sellers. C. many buyers and many sellers. D. one buyer and one seller.
Which of the following is FALSE concerning the long run?
A) Economists believe that fiscal and monetary policies have no permanent effects on the economy. B) Economists more or less agree that the economy tends to fluctuate around the level that is consistent with full employment. C) In the long run, the unemployment rate returns to its normal level. D) The current account must tend toward balance in the long run. E) None of the above.