The short run sequence of events following an unanticipated shift to a more expansionary monetary policy would be
a. lower interest rates, decrease in aggregate demand, and a reduction in output.
b. lower interest rates, increase in aggregate demand, and an expansion in output.
c. higher interest rates, decrease in aggregate demand, and a reduction in output.
d. higher interest rates, increase in aggregate demand, and an expansion in output.
B
You might also like to view...
In the Case in Point on "The Monks of St. Benedict's," the Monks got out of the egg business largely because:
A) there was a large increase in the supply of eggs from other producers. B) of the increase in the price of chicken feed. C) the Pope forbade them from working on Sunday. D) a huge increase in the demand for eggs caused the price of eggs to increase, and their operation was too small to meet the demand.
Based on the Net Interest Margin the poor bank performance in the late 1980s
A) was not the result of interest-rate movements. B) was not the result of risky loans made in the early 1980s. C) resulted from a narrowing of the gap between interest earned on assets and inters paid on liabilities. D) resulted from a huge decrease in provisions for loan losses.