If the intersection of the IS curve with the horizontal axis comes at a level of output below the natural level of output, lowering interest rate to zero will
A) bring economy back to natural output.
B) not bring the economy back to natural output.
C) will have inflationary effects on the economy.
D) will cause saving rates to increase.
D
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If a bank receives a $1 million discount loan from the Federal Reserve, then the bank's reserves will
A) not change. B) increase by less than $1 million. C) increase by $1 million. D) increase by more than $1 million.
Which of the following is a property of dummy variable regression?
A. This method is best suited for panel data sets with many cross-sectional observations. B. The R-squared obtained from this method is lower than that obtained from regression on time-demeaned data. C. The degrees of freedom cannot be computed directly with this method. D. The major statistics obtained from this method are identical to that obtained from regression on time-demeaned data.