Refer to the diagram. Assume that nominal wages initially are set on the basis of the price level P 2 and that the economy initially is operating at its full-employment level of output Q f . In the short run, demand-pull inflation could best be shown as:
A. a move from b to c on AS 2 .
B. a move from b to c to d.
C. a change of aggregate supply from AS 2 to AS 3 .
D. a move from b to d.
A. a move from b to c on AS 2 .
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In an open economy, an increase in foreign output would cause the IS curve to shift ________ and a decrease in the foreign real interest rate would cause the IS curve to shift ________
A) down; down B) down; up C) up; down D) up; up
The maximum potential money multiplier is equal to
A) one minus the reserve ratio B) the reserve ratio. C) the inverse of the required reserve ratio. D) the number of dollars on reserve.
Which of the following displays rivalry and excludability in consumption?
A) public goods B) private goods C) quasi-public goods D) common resources
A person acting as a supervisor as well as a residual claimant:
a. attempts to make value-maximizing investment decisions. b. aims to maximize a firm's sales. c. facilitates maximum investment in capital goods. d. reduces risk of opportunism.