Refer to the graph below. Assume that the economy is initially in equilibrium at the intersection of AD1 and AS1. Suppose that there is economic growth which shifts AS1 to AS2. Because of the shift from AS1 to AS2, a monetarist following a monetary rule would call for an increase in aggregate demand such that the price level and quantity of real domestic output would be:
A. P4 and Q2
B. P3 and Q2
C. P2 and Q2
D. P1 and Q2
B. P3 and Q2
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A commercial bank puts the funds it receives from various sources into
A) securities, cash assets and loans. B) loans, notes and coins in the bank's vault and deposits. C) reserves, deposits and loans. D) securities, cash assets and deposits.
The business cycle refers to
A) fluctuations in the level of real GDP around potential GDP. B) changes in the level of nominal GDP. C) changes in the level of the stock market. D) changes in the level of employment.
Everything else equal, the AC curve will shift when
A. the price of the product rises. B. technological change raises the MPP of one input. C. output rises. D. increasing returns to scale are present.
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A. is both process- and outcome-oriented. B. is neither process- nor outcome-oriented. C. is not a process-oriented notion of equity. D. is not an outcome-oriented notion of equity.