Given Keynesian assumptions about the shape of the aggregate supply curve and an economy suffering a recession, which of the following is most likely to occur if the Fed pursues expansionary monetary policy?
A. The equilibrium price level and output will both increase until full employment is reached.
B. The equilibrium price level and output will both decrease.
C. The equilibrium price level will increase but output will stay the same.
D. The equilibrium output will increase but the price level will stay the same until full employment is reached.
D. The equilibrium output will increase but the price level will stay the same until full employment is reached.
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Refer to the above figure. Which panel demonstrates the law of demand?
A) Panel A B) Panel B C) Panel C D) Panel D
Whenever there is a surplus at a particular price, the quantity sold at that price will equal: a. the quantity demanded at that price
b. the quantity supplied minus the quantity demanded. c. the quantity supplied at that price. d. (quantity demanded plus quantity supplied)/2.
What type of economic system is commonly described as being controlled by an "invisible hand"?
A. a traditional economy B. a command economy C. a market economy D. a communist economy
Which of the following defines marginal utility?
A. The change in total utility divided by the price of a product B. The maximum amount of satisfaction from consuming a product C. The total satisfaction derived from a certain amount of the product D. The additional satisfaction from consuming one more unit of a product