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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In an English auction, the ________ bidder wins
A) highest B) second-highest C) first D) second
If the fiscal policy makers aim to increase aggregate demand, they will likely enact:
A. expansionary fiscal policy. B. contractionary fiscal policy. C. expansionary monetary policy. D. contractionary monetary policy.
Which of the following is a critique of GDP discussed in the text?
Select one: a. GDP does not account for resource depletion. b. GDP does not account for well-being. c. GDP does not include household production. d. All of the answers listed.
Because individuals initially own more time than they consume and sell the difference to their employers:
A. the direction of the income effect is the opposite than it is for other goods. B. the direction of the income effect is the same as it is for other goods. C. there is no income effect resulting from a change in the individual's wage rate. D. the income effect of a wage change is relatively small.