Suppose there is a decrease in aggregate demand. If the Fed wants to stabilize output it could
a. buy bonds. These purchases also move the price level closer to its original level.
b. buy bonds. However these purchases move the price level farther from its original level.
c. sell bonds. These sales also move the price level closer to its original level.
d. sell bonds. However these sales move the price level farther from its original level.
a
You might also like to view...
Diseconomies of scale definitely means that as the firm increases its output, its
A) long-run average total cost increases. B) long-run average total cost decreases. C) short-run average total cost increases. D) short-run average total cost decreases.
Suppose a tax is imposed on the sellers of fast-food French fries. The burden of the tax will
a. fall entirely on the buyers of fast-food French fries. b. fall entirely on the sellers of fast-food French fries. c. be shared equally by the buyers and sellers of fast-food French fries. d. be shared by the buyers and sellers of fast-food French fries but not necessarily equally.