If a countrys inflation rate is below the central banks target rate, the central bank is most likely to:
A. Sell government securities.
B. Increase the reserve requirement.
C. Decrease the overnight lending rate.
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Real GDP is best described as the value of:
A. Current output measured at current prices.
B. Current output measured at base-year prices.
C. base-year output measured at current prices.
Both monetary and fiscal policy are used to:
A. Balance the budget.
B. Achieve economic targets.
C. Redistribute income and wealth.
In short-run equilibrium, if aggregate demand is increasing faster than long-run aggregate supply:
A. The price level is likely to increase.
B. Downward pressure on wages should ensue.
C. Supply will increase to meet the additional demand.
The IS curve illustrates which of the following relationships？
A. Direct relationship between aggregate income and the price level.
B. Inverse relationship between aggregate income and the price level.
C. Inverse relationship between aggregate income and the real interest rate.
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