Question 1
An increase in the
Z factors represents
◦ a tightening of monetary policy.
◦ an easing of monetary policy.
◦ an expansionary fiscal policy.
◦ a contractionary fiscal policy.
Question 2
Other things equal, a decrease in the
Z factors will ________ the equilibrium price level and ________ equilibrium output.
◦ increase; increase
◦ increase; decrease
◦ decrease; increase
◦ decrease; decrease