Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C
B. B; C
C. B; A
D. D; B
Answer: D
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How much money would be loaned out if there was no usury law?
International market failures:
A. are equally likely to be solved in the presence or absence of a world government. B. are more likely to be solved in the presence of a world government. C. are less likely to be solved in the presence of a world government. D. do not occur in the presence or absence of a world government.
Refer to the graph. If the initial equilibrium interest rate was 5 percent and the money supply increased by $100 billion, then the new interest rate would be:
A. 1 percent
B. 2 percent
C. 3 percent
D. 4 percent