You hold an FDIC insured savings account at your neighborhood bank. Your current balance is $275,000. If the bank fails you will receive:
A. $125,000.
B. $250,000.
C. $275,000.
D. $100,000.
Answer: B
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By analyzing aggregate demand through its component parts, we can conclude that, everything else held constant, a decline in the inflation rate causes
A) an increase in real interest rates, an increase in investment spending, and a decline in aggregate output demand. B) a decline in real interest rates, a decrease in investment spending, and an increase in aggregate output demand. C) a decline in real interest rates, an increase in investment spending, and an increase in aggregate output demand. D) an increase in real interest rates, a decline in investment spending, and a decline in aggregate output demand.
The vertical long-run Phillips curve
a. implies that the Fed cannot influence the unemployment rate in the long run. b. implies that the Fed can influence the unemployment rate in the long run. c. implies that the Fed can influence both the unemployment rate and the inflation rate in the long run. d. implies that the Fed can reduce the unemployment rate in the long run only at the expense of higher inflation rate. e. none of the above.
If $1,000 is deposited in a bank with 100% reserve requirements, that bank can lend out:
a. $0 b. $1,000 c. A multiple of $1,000 d. Less than $1,000, but more than $0. e. $900.
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B