k. A policy mix of an expansionary fiscal policy with a contractionary monetary

Question

k. A policy mix of an expansionary fiscal policy with a contractionary monetary policy use output to, and interest rates to A. decrease; decrease B. decrease; increase C. decrease; increase, decrease, or remain unchanged D. increase, decrease, or remain unchanged; increase The Federal Open Market Committee (FOMC) directs the open market operation ral Reserve System. Currently, some of the voting seats on the FOMC are vacar rdless of whether or not they are vacant, the total number of voting seats in the A. five B. seven C. twelve D. nineteen

Explanation / Answer

1) Expansionary fiscal policy shifts AD rightwards while contractionary monetary policy shifts AS leftwards. This causes increase in interest rate and ambiguous effect on output. Change in output depends upon the magnitude of shifts of AD and AS curve.

So, answer is d) increase, decrease, or remain unchanged; increase

2) C. twelve

FOMC consists of twelve members so total number of seats are 12.

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.