What effect does expansionary monetary policy have on short-term real interest rates?
a. Expansionary monetary policy tends to push short-term interest rates upward.
b. Expansionary monetary policy tends to push short-term interest rates downward.
c. The effect of expansionary monetary policy on short-term interest rates is unpredictable.
d. Expansionary monetary policy has no effect on short-term interest rates.
B
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Which of the following is a microeconomic consequence of inflation?
A. Greater unemployment. B. Wealth effects. C. Greater real income. D. None of the other choices.
Based on the figure below, an economy in short-run equilibrium at point A has a(n) ________ gap. The gap could be eliminated by the self-correcting mechanism of the economy and eventually achieve long-run equilibrium at point ________ or the central bank could intervene with monetary easing and the long-run equilibrium would be at point ________. 
A. expansionary; C; B B. recessionary; B; C C. expansionary; B; C D. recessionary; C; B