Suppose the intersection of the IS and LM curves is to the left of the FE line. A decrease in the price level would most likely eliminate a disequilibrium among the asset, labor, and goods markets by
A) shifting the LM curve down and to the right.
B) shifting the IS curve up and to the right.
C) shifting the IS curve down and to the left.
D) shifting the FE curve to the left.
A
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Suppose real GDP is $14 trillion and potential real GDP is $14.4 trillion. An increase in government purchases of $400 billion would cause real GDP to ________ potential real GDP (assuming a constant price level)
A) be less than B) be more than C) equal D) There is insufficient information given here to draw a conclusion.
Which of the following is true about the U.S. trade with Ireland post-1990?
a. The U.S. became a net exporter of software to Ireland. b. Output of potato per acre doubled with the introduction of new techniques, making the U.S. a net exporter of potatoes to Ireland. c. The U.S. production set shifted inward and Ireland gained advantage in the production of both software and potatoes. d. Productivity growth in the U.S. software industry was higher despite the cost-shifting innovations witnessed Ireland.
A vertical long-run aggregate supply curve indicates that
a. an increase in the price level will not expand an economy's output capacity in the long run. b. outputs greater than the long-run supply constraint cannot be achieved. c. an increase in the price level will permit the economy to achieve a higher level of output. d. an increase in the price level will promote technological change and more rapid economic growth.
The answer is: "Policymakers are not aware of changes in the economy as soon as they happen." What is the question?
A) What is the wait-and-see lag? B) What is the data lag? C) What is the effectiveness lag? D) What is the transmission lag? E) none of the above