The Council of Elrond has decided to increase taxes, and the central bank of Elrond has decided to conduct open market purchases of financial assets.
Assuming that wages are sticky, which of the following best describes the impact of these actions on real output and the price level?
Choose 1 answer:
(A) Impact on real output indeterminate; impact on the price level indeterminate
(B) Real output increases; the price level increases
(C) Real output decreases; impact on the price level is indeterminate
(D) Real output will decrease; the price level will decrease
(E) Impact on real output is indeterminate; price level decreases
Not the question you are looking for? Ask here!
Enter question by text
Enter question by image
Upgrade to Asksia Pro
Join a AskSia's Pro Plan, and get 24/7 AI tutoring for your reviews, assignments, quizzes and exam preps.