Suppose the U.S. economy is operating at potential output. A negative supply shock that is accommodated by an open market purchase by the Federal Reserve will cause ________ in real GDP in the long run and ________ in inflation in the long run, everything else held constant.
A) no change; an increase
B) no change; a decrease
C) an increase; an increase
D) a decrease; a decrease
A
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An increase in demand is represented graphically by a rightward shift of the demand curve
Indicate whether the statement is true or false
If a large change in the variable measured on the x-axis is associated with a small change of the variable measured on the y-axis, the line is ________ and the slope is ________
A) downward-sloping; large B) downward-sloping; small C) upward-sloping; small D) either downward or upward-sloping; small
The value of every monetary transaction in the economy would be included in
a. GDP. b. potential GDP. c. personal income. d. national income. e. None of the above.
According to the graph shown, if the economy were to open to free trade, it would become:
This graph demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.
A. a net-importer.
B. a net-exporter.
C. an autarky.
D. less efficient with less overall market surplus.