Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1.
B. P2 and Y1.
C. P2 and Y3.
D. P1 and Y2.
Answer: B
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Since 1981, the
A) real wage rate increased steadily. B) nominal wage rate increased and the real wage rate did not change by very much. C) real wage rate increased more than the nominal wage rate. D) nominal wage rate increased at an uneven pace whereas the increase in the real wage rate was steady and constant. E) nominal wage rate and real wage rate both decreased.
A prominent postwar pattern of U.S. government budget deficits was broken in 1983-1990 as
A) recession was accompanied by a shrinking deficit. B) recession was accompanied by a growing deficit. C) recovery from recession was accompanied by a shrinking deficit. D) recovery from recession was accompanied by a growing deficit.
Assume a money multiplier of 3. If the Treasury finances a $30 million expenditure by selling securities to the Fed, the effect of this transaction on the money supply is that it will
A) remain unchanged. B) rise by $3 million. C) rise by $30 million. D) rise by $90 million.
The correlation between X and Y
A) cannot be negative since variances are always positive. B) is the covariance squared. C) can be calculated by dividing the covariance between X and Y by the product of the two standard deviations. D) is given by corr(X, Y) = .