To Eliminate the Output Gap Shown in the Figure Below,the

question 89

Multiple Choice

To eliminate the output gap shown in the figure below,the central bank should take a(n) _______ and _______ the official interest rate by a sufficient amount.If successful,such a policy may be expected shift the expenditure line _______.

• A) expansionary monetary policy action;lower;down
• B) contractionary monetary policy action;lower;down
• C) expansionary monetary policy action;lower;up
• D) contractionary monetary policy action;raise;up
• E) expansionary monetary policy action;raise;up

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Definitions:

Monocline

A fold defined by local steepening in gently dipping layers.

Anticline

A type of fold in sedimentary strata that resembles an arch, with the oldest rocks at its core.

Thrust Fault

A thrust fault is a type of geological fault where the hanging wall moves up relative to the footwall, commonly found in areas of compression.

Monocline

A geological fold in sedimentary strata that results in a step-like form on the Earth's surface, indicating singular direction of dip.