5 When fighting a recessionary gap, central banks willSelect one:O a Increase; decreaseO b. Increase; increaseOc. Decrease; decreaseOd. Decrease; increaseWhen leakages exceed injections, central banks will attempt toSelect one:a Decrease; decreaseOb increase increaseOC. Increase decreaseOd Decrease: increasethe bank rate in order to,interest rates in order tothe amount of loans being provided by commercial banksequilibrium income.

Recessionary gap is created when aggregate demand falls in the economy. Government and central bank…

When fighting a recessionary gap, central banks will elect one: O a Increase; decrease O b. Increase; increase i Oc Decrease; decrease Od. Decrease; increase the bank rate in order to, the amount of loans being provided by commercial banks

When fighting a recessionary gap, central banks will elect one: O a Increase; decrease O b. Increase; increase i Oc Decrease; decrease Od. Decrease; increase the bank rate in order to, the amount of loans being provided by commercial banks

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter34: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 4CQQ

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Question

When fighting a recessionary gap, central banks will
Select one:
O a Increase; decrease
O b. Increase; increase
Oc. Decrease; decrease
Od. Decrease; increase
When leakages exceed injections, central banks will attempt to
Select one:
a Decrease; decrease
Ob increase increase
OC. Increase decrease
Od Decrease: increase
the bank rate in order to,
interest rates in order to
the amount of loans being provided by commercial banks
equilibrium income.

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