Solved

If the Federal Reserve Tightens Monetary Policy So That Real

Question 25

Multiple Choice

If the Federal Reserve tightens monetary policy so that real interest rates increase and real GDP decreases,


A) tax revenues will decrease, decreasing the government's cash deficit, and increasing the full-employment deficit.
B) tax revenues will increase, decreasing the government's cash deficit, and decreasing the full-employment deficit.
C) tax revenues will decrease, increasing the government's cash deficit, but not changing the full- employment budget balance.
D) tax revenues will increase, decreasing the government's cash deficit, but not changing the full-employment budget balance.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents