Look at the above figure. Suppose the economy was initially in equilibrium at point A. What point would represent the short-run equilibrium if the Fed makes an open market purchase of bonds?
A. A
B. B
C. C
D. D
Answer: B
You might also like to view...
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
In a small country, the adult population equals 10,000. In that country, 8,000 people are in the labor force and 200 people are unemployed. The unemployment rate equals
A) 2.5 percent. B) 2 percent. C) 4 percent. D) an undetermined amount given the lack of information.
For many developing countries, natural resources or agricultural commodities make up a ________ share of exports
A) large B) moderate C) nonexistent D) small E) insubstantial
________ major distinguishing characteristic is that firms are interdependent.
A. Perfect competition's B. Monopolistic Competition's C. Monopoly's D. Oligopoly's