What kinds of economic conditions indicate that the Fed should expand the money supply?
Recessionary conditions—slow or negative economic growth, high unemployment, and little or no
inflation—usually indicate a need for expansionary monetary policy.
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
If velocity is more stable than the IS curve, then targeting the money supply
a. will be effective in stabilizing the LM curve and interest rates. b. has the same effects as targeting interest rates. c. will be less effective in stabilizing aggregate demand than targeting interest rates. d. is not possible.
Economic discrimination occurs when two equal factors of production are paid differently.
Answer the following statement true (T) or false (F)
Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of an increase in technology in the market for anything?
A. Figure 1 B. Figure 2 C. Figure 3 D. Figure 4