This topic contains a solution. Click here to go to the answer

Author Question: Which of the following if true would suggest that an expansionary gap exists in an economy? a. ... (Read 62 times)

mynx

  • Hero Member
  • *****
  • Posts: 555
Which of the following if true would suggest that an expansionary gap exists in an economy?
 a. Rapid inflation during a period when plant capacity utilization is below average
 b. A steady price level coupled with a 5 percent unemployment rate
 c. An unemployment rate below its natural rate and an unexpected increase in the consumer price index
  d. Sluggish growth in the rate of inflation and an exceptional increase in the Dow Jones average
 e. A modest increase in the number of new unemployment claims and a lower than expected price level

Question 2

If the Fed sells U.S. government securities in the open market, gross domestic product:
 a. increases because the resulting increase in the interest rate leads to a decrease in investment.
  b. increases because the resulting decrease in the interest rate leads to an increase in investment.
  c. decreases because the resulting increase in the interest rate leads to a decrease in investment.
  d. decreases because the resulting increase in the interest rate leads to an increase in investment.
  e. decreases because the resulting decrease in the interest rate leads to an increase in investment.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

InfiniteSteez

  • Sr. Member
  • ****
  • Posts: 340
Answer to Question 1

c

Answer to Question 2

c





 

Did you know?

Persons who overdose with cardiac glycosides have a better chance of overall survival if they can survive the first 24 hours after the overdose.

Did you know?

Pope Sylvester II tried to introduce Arabic numbers into Europe between the years 999 and 1003, but their use did not catch on for a few more centuries, and Roman numerals continued to be the primary number system.

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates's recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

About one in five American adults and teenagers have had a genital herpes infection—and most of them don't know it. People with genital herpes have at least twice the risk of becoming infected with HIV if exposed to it than those people who do not have genital herpes.

For a complete list of videos, visit our video library