Question
1) Determine whether the following questions are true or false. a) Other things the same, an increase in short-run aggregate supply reduces unemployment and raises
1) Determine whether the following questions are true or false.
a) "Other things the same, an increase in short-run aggregate supply reduces unemployment and raises inflation in the short run."
b) "In response to open market operations, real and nominal interest rates move together in the short run."
c) If the ultimate change in income is less than the initial injection of government expenditure, then you can conclude that the multiplier effect dominates the crowding-out effect. "
d) "In response to a recession, a central bank can perform open market sales in order to lower interest rates and incentivize investment."
e) The underlying principles of the classical dichotomy also drive the long-run Phillips Curve being vertical.
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