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Author Question: When would the Fed want to carry out a monetary policy that decreases aggregate demand? What will ... (Read 60 times)

urbanoutfitters

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on: Jun 29, 2018
When would the Fed want to carry out a monetary policy that decreases aggregate demand?
 
  What will be an ideal response?

Question 2

________ increases potential GDP.
 
  A) A decrease in the money wage rate
  B) A recessionary gap
  C) A recession
  D) An increase in the amount of human capital
  E) An increase in aggregate demand


jomama

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The Fed wants to decrease aggregate demand when it is worried about inflation, that is, when there is an inflationary ga

Answer to Question 2

D


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