If the Current Equilibrium Output Level Is Above the Full-Employment

question 223

Multiple Choice

If the current equilibrium output level is above the full-employment output level,the Fed should consider

• A)selling government securities,raising the discount rate,and raising the required reserve ratio.
• B)selling government securities,lowering the discount rate,and raising the required reserve ratio.
• C)buying government securities,lowering the discount rate,and raising the required reserve ratio.
• D)buying government securities,raising the discount rate,and raising the required reserve ratio.
• E)selling government securities,raising the discount rate,and lowering the required reserve ratio.

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Definitions:

Price

The financial sum needed for the purchase of a product or service.

Marginal Product

The change in output resulting from employing one more unit of a specific input, keeping all other inputs constant.

Bricklayers

Expert craftsmen specialized in using bricks, blocks, and various building materials to build or mend walls, partitions, arches, and additional structural elements.

Equilibrium Market Wage

The equilibrium market wage is the wage rate at which the quantity of labor supplied equals the quantity of labor demanded in a given market.