Refer to Figure 27-6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely pursue
A) expansionary automatic stabilizers.
B) contractionary monetary policy.
C) contractionary fiscal policy.
D) expansionary monetary policy.
E) expansionary fiscal policy.
C
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When the price of a good changes, other things constant, what occurs?
A) The supply curve shifts to the right. B) The supply curve shifts to the left. C) The supply curve becomes flatter. D) The supply curve becomes steeper. E) Only quantity supplied changes.
If actions by the President and Congress reduce the federal government budget deficit, then interest rates will _____, the U.S. dollar will _____, and the foreign trade deficit will _____
a. increase; appreciate; increase b. increase; depreciate; increase c. decrease; appreciate; decrease d. decrease; depreciate; increase e. decrease; depreciate; decrease
If people come to expect ongoing inflation, what will happen over time independent of the Fed's response?
a. The long-run aggregate supply curve will shift to the right. b. The aggregate supply curve will continue to shift upward. c. The aggregate demand curve will continue to shift to the right. d. The aggregate supply curve will continue to shift downward. e. The aggregate demand curve will continue to shift to the left.
Explain the effect of a usury law