Refer to the accompanying figure.
An economy is currently in long-run equilibrium at point B, at an inflation rate of ?', which is too high for to sustain economic growth. If an anti-inflationary policy is enacted, the economy will be in short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________.
A. A; B
B. B; C
C. A; C
D. B; A
Answer: C
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A liquidity provider is someone who:
A. helps make a market more liquid by being always ready to buy or sell an asset. B. works at a bank and specializes in loans. C. works in the financial system. D. invest in the economy.
In an open economy, a decrease in capital inflows ________ the equilibrium domestic real interest rate and ________ the quantity of domestic investment.
A. decreases; decreases B. decreases; increases C. increases; decreases D. increases; increases
The relationship between the value and the price of a stock suggests that
A. the equilibrium price of a stock strikes a balance between those who think the stock is worth more and those who think the stock it's worth less at the current price. B. it is the stock market's best guess regarding the expected value of the company's future profits. C. stocks are overvalued. D. both A and B are true.
Suppose someone told you that the chain-weighted price index for GDP in a country was 135. Why does this fact not convey much information to you?
What will be an ideal response?