Refer to the diagram. The initial aggregate demand curve is AD 1 and the initial aggregate supply curve is AS 1 . If government offsets the decline in real output resulting from short-run cost-push inflation by increasing aggregate demand from AD 1 to AD 2
A. real output will rise above Q f .
B. the price level will rise from P 1 to P 2 .
C. it is possible that aggregate supply will shift rightward from AS 2 because nominal wage
demands will rise.
D. the price level will rise from P 2 to P 3 .
D. the price level will rise from P 2 to P 3 .
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Suppose the Fed makes a $5 million discount loan to a bank. Illustrate how this affects the balance sheets of the Fed and the banking system
What will be an ideal response?
If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as:
A. a cartel. B. countervailing power. C. a bilateral monopoly. D. an internal labor market.
Existing firms in the rental car industry will stay in the industry but will not want to undertake any investment projects other than to replace depreciating capital stock if the normal rate of return in the industry is ________ and the return that firms earn in this industry equals exactly ________.
A. 12%; 9% B. 6%; 6% C. 4%; 7% D. 1%; 2%
Perfectly competitive industries are characterized by a homogeneous product.
Answer the following statement true (T) or false (F)