If the Fed's monetary policy reaction function does not change, then when inflation decreases the Fed responds by the real interest rate, which consumption and investment spending, which output.

A. decreasing; increases; increases
B. decreasing; decreases; decreases
C. increasing; decreases; decreases
D. increasing; increases; decreases

Answer: A

Economics

Refer to the figure above. What is the maximum profit that the firm can make?

A) $30 B) $60 C) $90 D) $180

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Economics

If people begin to hold more cash, the money multiplier process will

a. increase in intensity. b. remain the same. c. decrease in actual size. d. cause larger amounts of excess reserves.

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Economics

If the Fed's monetary policy reaction function does not change, then when inflation decreases the Fed responds by ________ the real interest rate, which ________ consumption and investment spending, which ________ output.