When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
Economics
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A) producer is better off producing more. B) consumers are better off if less of the product is sold. C) social welfare is not maximized. D) the unit increased total profit.
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Who does NOT earn economic rent in a competitive factor market?
A) No one B) Everyone C) The last factor of production hired D) The inframarginal workers E) Only owners of physical properties earn economic rents
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