Assume the economy is initially in equilibrium where potential GDP is less than real GDP
If the expected inflation rate, the term structure effect, and the default-risk premium are constant, ________ in the Fed's target short-term nominal interest rate will shift up the MP curve which will result in real GDP ________. A) an increase; falling
B) an increase; rising
C) a decrease; falling
D) a decrease; rising
B
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Which of the following would be included in the calculation of Gross Domestic Product (GDP)?
A) the value of spending on new machinery and equipment B) the value of the sale of 1,000 shares of IBM stock C) the value of transfer payments D) the value of the sale of a used guitar
If a monopolist's marginal revenue is less than zero over a range of output, then price elasticity of demand must be: a. greater than one. b. equal to one
c. less than one. d. equal to zero.