Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2.
B. P3 and Y1.
C. P2 and Y2.
D. P2 and Y3.
Answer: D
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A) ultimately lead to higher inflation. B) lead to lower interest rates. C) lead to a slower rate of money growth. D) lead to higher bond prices.
Durable, marketable skills that generate higher income are also known as:
A. physical capital. B. investment capital. C. human capital. D. education capital.
If the money supply is $80 billion, the velocity of money is 5, and real GDP is $320 billion, then the price level equals:
a. 51.20. b. 20. c. 4. d. 2.75. e. 1.25.
Which of the following determines the exchange rate between two currencies in the long run?
a. Relative interest rates b. Relative output levels c. Expectations of future exchange rates d. Relative price levels e. Expectations of future interest rates.