To eliminate a recessionary gap, the Fed can:
a. increase the money supply as it will increase the interest rate and investment
b. increase the money supply as it will decrease the interest rate and increase investment.
c. decrease the money supply as it will increase the interest rate and investment.
d. decrease the money supply as it will decrease the interest rate and investment.
e. decrease the money supply as it will increase the interest rate and decrease investment.
b
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At a price of $8 per dozen, Chuy sells 40 dozen homemade tamales per week. When he raised his price to $12 per dozen, he still sold 40 dozen per week. Based on this information, the demand for his tamales is
A) unit elastic. B) perfectly elastic. C) perfectly inelastic. D) inelastic.
Donnie's Donuts incurs $450,000 per year in explicit costs and $200,000 in implicit costs. The bakery earns $800,000 in revenues and has $2 million in net worth. Based on this information, what is the economic profit for Donnie's Donuts?
A) $150,000 B) $350,000 C) $600,000 D) $1.2 million