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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David Ellwood suggests the explanation for low employment rates among poor families is Flawed Character
Indicate whether the statement is true or false
The larger the implicit costs of a business:
A. the greater accounting profit will be. B. the smaller economic profit will be. C. the more likely it will be a successful venture. D. the smaller the explicit costs will be.
Firms in long-run equilibrium in a perfectly competitive industry will produce at the low points of their average total cost curves because
a. free entry implies that long-run profits will be zero no matter how much each firm produces. b. firms seek maximum profits and to do so they must choose to produce where average costs are minimized. c. firms maximize profits and free entry implies that maximum profits will be zero. d. firms in the industry desire to operate efficiently.
At the long-run equilibrium level of output, the monopolist's marginal cost will:
a. exceed price. b. equal price. c. be less than price. d. be less than marginal revenue.