To close a recessionary gap, the Fed ________ interest rates which ________ aggregate spending and ________ short-run equilibrium output.
A. reduces; increases; decreases
B. raises; decreases; increases
C. raises; decreases; decreases
D. reduces; increases; increases
Answer: D
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The Bureau of Economic Analysis releases its estimate for GDP before it releases its estimate for GDI
A) only for the first quarter of the year. B) only for the first two quarters of the year. C) only for the fist three quarters of the year. D) for all four quarters of the year.
Which of the following is true?
A) When income tax rates fall, it is possible for tax revenues to rise. B) When income tax rates fall, it is possible for tax revenues to fall. C) All economists agree that a monetary rule is preferred to discretionary Fed policy. D) All economists agree that discretionary Fed policy is preferred to a monetary rule. E) a and b