In the above figure, assume the economy is in equilibrium at point d. Then the Fed decreases the money supply so that the new aggregate demand curve is AD1. In the long run, the new price level will be
A. 120.
B. 130.
C. 100.
D. 110.
Answer: C
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The law of large numbers allows insurance companies to
A) hold capital market instruments as assets without fearing overly large numbers of defaults. B) hold money market instruments as assets without fearing overly large numbers of defaults. C) predict the average number of occurrences of insurable events in a large population of policyholders. D) charge higher premiums than necessary, knowing that large numbers of individuals will pay them.
People who are not currently employed but say they want a job are counted as unemployed only if they: a. have previously held a job
b. are actively seeking employment. c. are discouraged workers. d. are between 16 and 65 years of age. e. are willing to accept any offer of employment.
Which of the following is an example of a renewable resource?
a. gold b. forests c. minerals d. coal e. land
Where should the economically-challenged regions of the world put their focus?
a. low inflation b. health and education c. balance of trade d. low unemployment