Refer to the above figure. Unexpected expansionary monetary policy has caused the aggregate demand curve to shift to AD2. In the long run
A. the unemployment rate will be larger than the rate before the expansionary monetary policy.
B. the unemployment rate will be the same rate as before the expansionary monetary policy.
C. the unemployment rate will be smaller than the rate before the expansionary monetary policy.
D. the unemployment rate can increase or decrease depending upon how much the LRAS will shift.
Answer: B
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What is the natural rate of unemployment?
A) the unemployment rate that exists when the economy is at a trough in a business cycle B) any unemployment rate that is above the inflation rate C) the unemployment rate that exists when the economy is at potential GDP D) an unemployment rate of 0%
John wants to buy a new lawn mower. He can either buy it in the US and pay $500 or buy it in Mexico and pay 6188 Mexican Pesos. At the exchange rate of 1 Mexican Peso=0.771US$, ignoring any other costs, he would
a. Prefer buying in the US b. Prefer buying in Mexico c. Be indifferent about where he buys his television d. None of the above
When we focus on labor as an input in the production process, we typically draw the production function by measuring the
a. quantity of labor on the horizontal axis and the quantity of output on the vertical axis. b. quantity of labor on the horizontal axis and the marginal product of labor on the vertical axis. c. quantity of labor on the horizontal axis and the value of the marginal product of labor on the vertical axis. d. value of the marginal product of labor on the horizontal axis and the quantity of output on the vertical axis.
Refer to the accompanying figure. When this market is in equilibrium, total producer surplus in the market is ________ per day.
A. $500 B. $375 C. $0 D. $250