The Fed's response to the zero lower bound problem was quantitative easing (or "QE"), where the Fed buys large amounts of bonds in order to:

When playing a game, you need to

A) anticipate the moves others might be making. B) choose a strategy based on the move you anticipate from your rival. C) both A and B D) neither A nor B

For this question, assume that there are decreasing returns to capital, decreasing returns to labor, and constant returns to scale. Now suppose that both capital and labor decrease by 5%. Given this information, we know that output (Y) will

A) not change. B) decrease by less than 5%. C) decrease by 5%. D) decrease by more than 5% but less than 10%. E) none of the above