Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting upward
C. Short-run aggregate supply shifting downward
D. Aggregate demand shifting leftward
Answer: B
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Exhibit 30-5
?
A. P4 - P2. B. P3 - P1. C. P2 - P1. D. P3 - P2. E. a and b
Which of the following would reduce the ability of the self-correcting mechanism to direct an economy out of a recession quickly?
a. a decrease in the real rate of interest b. resource prices that are inflexible in a downward direction c. an increase in aggregate demand d. a low level of savings
As a portion of total assets measured in billions of dollars, the least important asset on the Fed's balance sheet is:
A. loans. B. foreign exchange reserves. C. securities. D. gold.
The model of short-run economic fluctuations focuses on
a. the price level and real GDP. b. productivity and economic growth. c. the neutrality of money and inflation. d. None of the above is correct.