When the Fed decreases the money supply:
a. aggregate demand and aggregate supply both increase
b. aggregate demand increases, which leads to movement along the short-run aggregate supply curve.
c. aggregate demand decreases, which leads to movement along the short-run aggregate supply curve.
d. aggregate supply increases, which leads to movement along the aggregate demand curve.
e. aggregate supply decreases, which leads to movement along the aggregate demand curve.
c
You might also like to view...
The upward slope of the supply curve reflects the
A. law of diminishing marginal utility. B. principle of specialization in production. C. fact that price and quantity supplied are inversely related. D. law of supply.
When prisoners use cigarettes or some other good as money, cigarettes become
a. commodity money, but do not function as a unit of account. b. commodity money and function as a unit of account. c. fiat money, but do not function as a unit of account. d. fiat money and function as a unit of account.
Kevin owns a personal training gymnasium in Orlando. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market
If Kevin trains 5 clients per day, he will ________ his profit and will ________. A) maximize; earn normal profit B) not maximize; earn a normal profit anyway C) maximize; earn an economic profit D) not maximize; earn an economic profit anyway E) not maximize; incur an economic loss
Procrastination, addiction, and honesty
a. may be explained by preferences that are not transitive b. violate the economist's assumption that "more is better" c. help to explain why the substitution effect is more powerful than the income effect d. are often inconsistent with narrowly defined rationality e. are inferior economic "goods".