When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.

There is a movement along the demand for money curve if

A) the nominal interest rate rises. B) there is an economic expansion so that real GDP increases. C) banking customers use ATM machines more. D) the price level increases.

At the level of output where marginal revenue equals marginal cost, price is less than average total cost but greater than average variable cost. In this instance, a profit-maximizing firm should: a. cease production as it is incurring an economic loss

b. continue operating at that output level in the short term, since total revenue will cover all of the firm's variable costs and some of its fixed costs. c. continue operating at that output level in the short term, since total revenue will cover all of the firm's fixed costs and a portion of its variable costs. d. decrease output to where marginal revenue exceeds marginal cost by the greatest dollar amount.