When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
You might also like to view...
Expenditures in GDP do not include
A) used goods or financial assets. B) financial assets or investment. C) used goods or investment. D) investment, stocks, or bonds. E) government expenditures on goods and services.
Refer to Figure 16-5. Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the competitive price
(This is also called an optimal two-part tariff.) What is the per-unit price it should charge, if any? A) It should not charge a price per unit; just a flat fee to consume as much of the product as desired. B) It should charge a range of prices from $40 to $12. C) $12 D) $16