Assume that because of a long policy lag, the Fed starts implementing expansionary monetary policy too late, i.e., at a time when the economy is already healing itself. As a result, the economy will probably move from an initial
A) recessionary gap to an even deeper recessionary gap.
B) recessionary gap to an inflationary gap.
C) inflationary gap to the natural level of Real GDP.
D) inflationary gap to a recessionary gap.
B
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Describe some of the problems in testing the Heckscher-Ohlin theory
What will be an ideal response?
When calculating the price elasticity of demand, which of the following conditions must be satisfied?
A) All other factors that influence demand must be held constant. B) Prices of related goods must be held constant but all other factors must be allowed to vary. C) Prices of related goods must be allowed to vary but all other factors must be held constant. D) All other factors than influence demand must be allowed to vary.
When you invest in a mutual fund
(A) Your money is invested in a variety of insurance policies. (B) You are guaranteed a fixed return on your investment. (C) Your money is invested in a variety of stocks and bonds. (D) You have easier access to your money than in a savings account.
In 1937-1938, the number of unemployed
A. fell dramatically by about 5 million. B. fell slightly by about 1 million. C. rose slightly by about 1 million. D. rose dramatically by about 5 million.