Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
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The prime rate is the interest rate at which banks can borrow from the Fed
Indicate whether the statement is true or false
Christina Romer's criticism of the belief that business cycles had moderated since World War II depended on the fact that
A) estimates of the timing of business cycles since World War II had been inaccurate. B) misuse of historical data had caused economists to understate the size of cyclical fluctuations in the post-World War II era. C) economists had ignored the roles of the government and international trade in mitigating economic fluctuations prior to World War II. D) economists had left out important components of GDP, such as wholesale and retail distribution, transportation, and services, in their pre-World War II estimates.
In which of the following U.S. cities is one of the 12 Federal Reserve Banks located?
A. Denver B. Seattle C. New York City D. Miami
The long-run average cost of production is defined as:
A. total cost divided by the quantity of output the firm chooses when at least one factor is fixed. B. total cost divided by the quantity of output the firm chooses when it can choose a production facility of any size. C. the quantity produced by a firm that can choose any size production facility. D. the quantity produced by a firm when at least one factor is fixed.