If the Economy Is at Potential Output and the Fed

question 66

Multiple Choice

If the economy is at potential output and the Fed decreases the money supply, in the SHORT run the likely result will be a(n) _____ in investment and a(n) _____ in consumption.

• A)increase; increase
• B)increase; decrease
• C)decrease; increase
• D)decrease; decrease

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Definitions:

Substantial

Of considerable importance, size, or worth.

Excavation

The process of moving earth, rock, or other materials with tools, equipment, or explosives to clear a space for construction or mining.

Pertinent Information

Relevant or applicable data or details that are directly related to a particular matter or situation being considered.

Misrepresentations

False statements or claims, made unintentionally or intentionally, that induce someone into a contract or agreement.