Number 12. According to the figure, if the economy started at full-employment output, expansionary monetary policy would cause real gross domestic product (GDP) to ______ in the short run.
a. increase from Y1 to Y2
b. increase from Y1 to Y3
c. decrease from Y2 to Y1
d. decrease from Y3 to Y2
e. increase from Y2 to Y3
c. decrease from Y2 to Y1
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Answer the following statement true (T) or false (F)
What best describes what makes a cooperative fixed exchange rate system work?
A) There are too many cooks in the kitchen. B) Take all you can get. C) You scratch my back, I'll scratch yours. D) Curiosity killed the cat.
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Indicate whether the statement is true or false
A bank wants to get rid of excess reserves by making loans because
a. it will be penalized if it does not get rid of the reserves b. the reserves do not earn interest c. it is afraid it will lose the excess reserves d. firms will not borrow from a bank with excess reserves e. the bank has too many liabilities