If the Fed Is Concerned About a Possible Recession,it ________

question 57

Multiple Choice

If the Fed is concerned about a possible recession,it ________ the federal funds rate and,in response,long-term interest rates ________ by a ________ amount than the change in short-term rates.

• A)raises;increase;larger
• B)lowers;increase;smaller
• C)raises;decrease;larger
• D)lowers;decrease;smaller
• E)raises;increase;smaller

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Definitions:

Persistently Rising Employment

Refers to a continuous increase in the number of employed individuals over a period, indicating economic growth and stability.

Backward-Sloping Labor Supply

A situation where higher wages lead to a decrease in the quantity of labor supplied because the income effect outweighs the substitution effect.

Labor-Augmenting

Technological improvements or changes that increase the efficiency or productivity of labor.

Marginal Productivity

The additional output resulting from the employment of one more unit of a factor of production, holding all other inputs constant.