Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P3 and Y1.
D. P2 and Y3.
Answer: D
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Banks can make loans as long as they have
A) deposits. B) reserves. C) required reserves. D) excess reserves. E) excess government securities.
Imagine that the economy is at a point that is above both AA and DD, where both the output and asset markets are out of equilibrium. Which first action is TRUE?
A) The economy will stay at this level in the short run. B) The exchange rate will first drop to a point on the AA schedule. C) The exchange rate will first move to a point on the DD schedule. D) The AA-DD equilibrium will shift to the position of the economy. E) The exchange rate will first move left to a position on the AA schedule.
If the demand elasticity for a product is -2, and a profit-maximizing firm sells the product for $10, its marginal cost must be
A) $5. B) $10. C) $15. D) $8.
Equity investors in real estate expect to receive a return on their investment through the collection of ________ and through ____________________.
Fill in the blank(s) with the appropriate word(s).