Refer to the above figure. Unexpected contractionary monetary policy has caused the aggregate demand curve to shift to AD2. In the long run
A) real GDP will be Y1, and the price level will be P1.
B) real GDP will be Y2, and the price level will be P2.
C) real GDP will be between Y1 and Y2, and the price level will be above P1.
D) real GDP will be between Y1 and Y2, and the price level will be below P2.
D
You might also like to view...
If the price of a good increases from $3 to $4, and the quantity demand remains unchanged, then the demand is
A) perfectly inelastic. B) perfectly elastic. C) somewhat elastic. D) infinite.
Why will there be less crowding out of private spending by government spending the less sensitive consumption, investment, and net exports are to changes in interest rates?
What will be an ideal response?
Faced with a hundred pounds of strawberries, the rational individual will eat:
A. all of the strawberries. B. strawberries until the satisfaction from eating strawberries is maximized. C. strawberries until the satisfaction from the last strawberry is maximized. D. strawberries until the satisfaction from eating the last strawberry begins to fall.
Which business practice is rarely challenged by the government under antitrust laws?
A. Price fixing B. Tying contracts C. Price discrimination D. Interlocking directorates