Suppose investment spending falls. To offset the change in output the Federal Reserve could
a. increase the money supply. This increase would also move the price level closer to its value before the decline in investment spending.
b. increase the money supply. However, this increase would move the price level farther from its value before the decline in investment spending.
c. decrease the money supply. This decrease would also move the price level closer to its value before the decline in investment spending.
d. decrease the money supply. However, this increase would move the price level farther from its value before the decline in investment spending.
a
You might also like to view...
The reason that average labor costs are higher in the United States than in Haiti is that
A) workers are more productive in the United States. B) U.S. workers have a comparative advantage. C) Haitian workers have a comparative advantage. D) Haitian workers do not have union representation.
What are the two main antitrust laws and when were they enacted?
What will be an ideal response?