From an initial long-run macroeconomic equilibrium, if the ...

[P68T]

From an initial long-run macroeconomic equilibrium, if the Federal Reserve anticipated that next year aggregate demand would grow significantly slower than long-run aggregate supply, then the Federal Reserve would most likely
 
  A) decrease interest rates. B) decrease income tax rates.
  C) increase interest rates. D) increase income tax rates.

Question 2

The automatic mechanism ________ the price level in the case of ________ and ________ the price level in the case of ________.
 
  A) lowers; recession; raises; expansion B) raises; expansion; raises; recession
  C) raises; recession; lowers; expansion D) lowers; expansion; lowers; recession

[FergA]

Answer to Question 1

A

Answer to Question 2

A

[P68T]

YES! Correct, THANKS for helping me on my review

[shewald78]

Gracias!