When the Fed sells bonds in the open market, in the product market (the aggregate demand- aggregate supply model),
A) real GDP will fall and the price level will rise.
B) real GDP and the price level will rise.
C) real GDP and the price level will fall.
D) real GDP will rise and the price level will fall.
Ans: C) real GDP and the price level will fall.
You might also like to view...
The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. There is no external benefit
What is the marginal benefit to the citizen of Kaffenia who consumes the 100th dozen doughnuts each day? A) $10.00 per dozen B) $8.00 per dozen C) $6.00 per dozen D) $4.00 per dozen
Economists are critical of monopoly because
A) monopolists can earn long-run economic profit. B) monopolists can create a deadweight loss. C) the demand for the monopolist's product is the market demand curve. D) economies of scope result in lower average costs.