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ents D Question 22 Okun's law shows the relationship between and positive; the unemployment gap; economic fluctuations negative; the unemployment gap; inflation positive; the unemployment gap; inflation O negative; inflation; economic fluctuations negative; the unemployment gap; economic fluctuationsfor Students D Question 21 Code Which of the following best describes why the aggregate demand curve slopes downward? If the central bank observes a low rate of inflation, the monetary policy rule dictates a decrease in the real interest rate. The low interest rate reduces output by reducing investment demand in the economy. If the central bank observes a high rate of inflation, the monetary policy rule dictates an increase in the real interest rate. The high interest rate reduces output by reducing investment demand in the economy. If the central bank observes a low rate of inflation, the monetary policy rule dictates an increase in the real interest rate. The high interest rate reduces output by reducing investment demand in the economy. If the central bank observes a high rate of inflation, the monetary policy rule dictates a decrease in the real interest rate. The low interest rate increases output by reducing investment demand in the economy. None of these answers is correct. PreviousD Question 23 According to the IS curve, when interest rates rise, and firms and households borrow more; governments produce more firms and households borrow less; firms produce less O firms and households borrow more; firms produce less firms and households borrow more; firms produce more O governments borrow less; firms produce less3 pts D Question 24 de percent. In response to the financial crisis, the Fed effectively lowered interest rates to 0 1 O 0 -1 O 3 O 5 PreviousIdents D Question 25 A higher interest rate and increases the discount rate; increases today's consumption reduces inflation; consumers spend more today is an incentive to borrow more today; reduces future consumption O reduces the present value of future income; reduces today's consumption increases the present value of future income; increases today's consumption Previous Next >