Suppose that IS and LM intersect at full-employment output. A leftward shift of IS will be followed by a __________ price level that shifts LM to the __________ in a return to full employment
A) rising; right
B) rising; left
C) falling; right
D) falling; left
C
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If the Federal Reserve purchases newly issued government debt
A) the effect is as if the Treasury had printed money to cover the deficit. B) the effect is the same as borrowing from the public. C) the money supply decreases. D) existing money is destroyed.
Starting from long run equilibrium, in response to a decrease in AD: a. The price level will increase more in the long run than in the short run
b. The short run equilibrium level of real output will be greater in the long run than in the short run. c. Neither the price level nor real output will change in the long run. d. Both a. and b. are correct
Which of the following policies would be most likely to reduce the efficiency of a country's economic organization?
a. a legal structure that establishes secure property rights b. imposition of tariffs and other barriers limiting international trade c. competitive markets d. a stable monetary system
Variable cost divided by quantity produced is
a. average total cost. b. marginal cost. c. profit. d. None of the above is correct.