If there is a leftward shift of the money demand curve, which of the following should the Fed do if it wants to keep output stable?
a. Lower its interest rate target
b. Sell bonds in the open market
c. Wait, since output usually does not change when the money demand curve shifts
d. Raise its interest rate target
e. Buy bonds in the open market
B
Economics
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Does the figure above illustrate a recessionary or an inflationary gap? What do potential GDP and real GDP equal? What is an appropriate fiscal policy to restore real GDP to potential real GDP?
What will be an ideal response?
Economics
In the short run, which one of the following causes a competitive firm to hire more labor?
A) an increase in wage rate B) an increase in the output price C) a specific tax imposed on the firm's output D) a decrease in the output price
Economics