Refer to Figure 14.3. Suppose the economy is initially at long-run equilibrium and the economy experiences a demand shock such as a stock market crash
Other things equal, following the effect of the stock market crash, the economy will ultimately end up at a new long-run equilibrium ________ the initial long-run equilibrium. A) that is the same as
B) with a higher real GDP and a higher inflation rate than
C) with a higher real GDP than, and the same inflation rate as
D) with a higher inflation rate than, and the same real GDP as
A
You might also like to view...
Use the following table, which shows the supply and demand schedules for the euro, to answer the next question.Quantity of Euros SuppliedPriceQuantity of Euros Demanded400$1.101003601.002003000.903002860.804002670.70500If European governments decide to fix the price of a euro at $0.80, they would have to ________.
A. sell 114 euros B. buy 114 euros C. sell 286 euros D. buy 286 euros
Health care costs have been rising due to
A) an aging population. B) new technologies. C) third-party financing. D) All of the above are correct.
Stockholders normally obtain higher expected payments than bondholders because
a. they are required by law to obtain a higher return. b. they face higher risk. c. the profit share declared as stock dividends is not taxable. d. they vote themselves higher returns.
What are the similarities and differences between the law of demand and the law of supply?
What will be an ideal response?