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Author Question: When answering this question, assume individuals consider only the medium-run effects of changes in ... (Read 76 times)

Mollykgkg

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on: Jun 30, 2018
When answering this question, assume individuals consider only the medium-run effects of changes in future variables when forming expectations of future output and future interest rates Suppose policy makers announce a reduction in future government spending. Which of the following will occur as a result of this expected reduction in government spending?
 
  A) a reduction in the expected future interest rate and no change in expected future output
  B) a reduction in the expected future interest rate and an increase in expected future output
  C) a reduction in the expected future interest rate and a reduction in expected future output
  D) a reduction in the expected future interest rate and an ambiguous effect on expected future output

Question 2

Firms with ________ ratings are considered the safest.
 
  A) AAA
  B) BBB
  C) CCC
  D) BB


mathjasmine

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Reply #1 on: Jun 30, 2018
Answer to Question 1

A

Answer to Question 2

A


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