When the interest rate is above the equilibrium interest rate, there is an excess ________ money and the interest rate will ________
A) demand for; rise
B) demand for; fall
C) supply of; fall
D) supply of; rise
C
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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 asĀ
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward
Refer to Scenario 8.2. The more elastic is demand for yachts,
A) the more Q will fall and the more P will rise. B) the less Q will fall and the more P will rise. C) the more Q will fall and the less P will rise. D) the less Q will fall and the less P will rise. E) the closer is the new equilibrium point to the old.
A firm may choose to raise price when
A. profits would increase at the higher price. B. MR > MC. C. average profit is zero. D. it relies on marginal analysis.
Which of the following often happens when the Fed and fiscal policy makers disagree?
a. The Fed changes its policy to align with the fiscal policy b. The Fed supports the fiscal policy even though it disagrees with this policy. c. The Fed tries to limit the effects of the fiscal policy. d. The Fed waits to see how effective the fiscal policy is before acting.