Author Question: From an initial long-run macroeconomic equilibrium, if the Federal Reserve anticipated that next ... (Read 68 times)

P68T · **on:** Jun 29, 2018

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