To eliminate the output gap shown in the figure below,the central bank should take a(n)_______ and _______ the official interest rate by a sufficient amount.If successful,such a policy may be expected shift the expenditure line _______.
A) expansionary monetary policy action;lower;down
B) contractionary monetary policy action;lower;down
C) expansionary monetary policy action;lower;up
D) contractionary monetary policy action;raise;up
E) expansionary monetary policy action;raise;up

Question

To eliminate the output gap shown in the figure below,the central bank should take a(n)_______ and _______ the official interest rate by a sufficient amount.If successful,such a policy may be expected shift the expenditure line _______. 
A) expansionary monetary policy action;lower;down 
B) contractionary monetary policy action;lower;down 
C) expansionary monetary policy action;lower;up 
D) contractionary monetary policy action;raise;up 
E) expansionary monetary policy action;raise;up

Quizplus · Accepted Answer

The Answer of To eliminate the output gap shown in the figure below,the central bank should take a(n)_______ and _______ the official interest rate by a sufficient amount.If successful,such a policy may be expected shift the expenditure line _______. 
A) expansionary monetary policy action;lower;down 
B) contractionary monetary policy action;lower;down 
C) expansionary monetary policy action;lower;up 
D) contractionary monetary policy action;raise;up 
E) expansionary monetary policy action;raise;up

To Eliminate the Output Gap Shown in the Figure Below,the