Refer to the above figure. Unexpected expansionary 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 above P2.
B. real GDP will be between Y1 and Y2, and the price level will be between P1 and P2.
C. real GDP will be Y2, and the price level will be P2.
D. real GDP will be Y1, and the price level will be P1.
Answer: A
You might also like to view...
According to the principle of increasing costs, as the production of one good expands, the opportunity cost of producing another unit of the good tends to increase.
Answer the following statement true (T) or false (F)
The Grangers were the first farm organization of importance and are noted for
a. encouraging the federal government to re-issue "greenbacks.". b. establishing cooperatives that sold farm and consumer goods to their members. c. refusing to sell grain to foreign countries. d. forming a cartel that set upper limits on members' output of basic farm products. e. All of the above.
Which of the following would result in a decrease in demand for BMW automobiles?
A. An increase in the price of BMW automobiles B. A decrease in the price of BMW automobiles C. A decrease in the price of Mercedes Benz automobiles D. An increase in the price of Mercedes Benz automobiles
Market failure occurs when
a. an optimal allocation of society's resources is not achieved b. negative externalities are taken into consideration c. positive externalities are taken into consideration d. government failure is at its worst e. all social costs are included in the prices of goods and services