In Some Sophisticated Macroeconomic Models, If Monetary Policy Is Used

question 11

Multiple Choice

In some sophisticated macroeconomic models, if monetary policy is used to combat recession, the real interest rate _____, whereas the real interest rate ______if fiscal policy is used.

• A)increases; decreases
• B)decreases; increases
• C)remains unchanged; increases
• D)decreases; remains unchanged

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Definitions:

Labor Costs

The total expense incurred by employers for the compensation of their workforce, including wages, salaries, benefits, and any other forms of compensation.

Declining Customer Orders

A reduction in the number of purchases or requests for services from customers, indicating potential challenges for a business.

Dismissal

The act of terminating an employee's employment due to circumstances such as misconduct, lack of fit, or economic downsizing.

Mistreated

Subjected to bad or inappropriate treatment or behavior.