Answer:
C. The self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces higher rather than lower real interest rates when the policy rate hits the zero lower bound, and this increase depresses planned spending and further widens the output gap.
Explanation:
The zero lower bound is the problem in macroeconomics when the nominal interest rate for short term is near to zero or at zero. It is the limit to which the interest rate can be lowered to but not any further.
The self correcting mechanism in economic imbalances stops working when the policy rate hits the zero bound of lower limit because the fall in the money value results in the higher real rate of interest than lower real interest rates. As a result, output gap widens.
Hence the answer is ---
C. The self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces higher rather than lower real interest rates when the policy rate hits the zero lower bound, and this increase depresses planned spending and further widens the output gap.
Answer:
Explanation:
The first Americans to live in the Oregon Country were fur traders. These men trapped beaver for their skins. Fur companies bought the skins to sell in the United States and Europe. The fur trappers were called mountain men.
Answer: Avoidance-avoidance conflict
Explanation: It is a conflict when one has to choose between two choices, and both are what one does not want. So three-year-old Cory has a choice between going to bed immediately or after five minutes and he doesn't want to go to bed at all, he wants to stay awake. Both alternatives are equally undesirable, going to bed for five minutes is no more desirable than going to bed immediately. That is why this conflict is called avoidance - avoidance conflict, because it presupposes double avoidance, that is, avoiding both choices.
