Use the following graphs to answer the next question.
In the graphs, the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve. All figures are in billions. The economy is at point Z on the investment demand curve. Given these conditions, what policy should the monetary authorities pursue to achieve a noninflationary, full-employment level of real GDP?
A. Sell government securities in the open market.
B. Decrease the reserve requirement.
C. Decrease the discount rate.
D. Make no change in monetary policy.
Answer: A
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In the figure above, with the tariff the United States imports ________ million shirts per year
A) 24 B) 8 C) 32 D) 16
In the short run, when the Fed decreases the quantity of money
A) bond prices fall and the interest rate rises. B) bond prices rise and the interest rate falls. C) the demand for money increases. D) the supply of money curve shifts rightward.
One purpose of regulation of financial markets is to
A) limit the profits of financial institutions. B) increase competition among financial institutions. C) promote the provision of information to shareholders, depositors and the public. D) guarantee that the maximum rates of interest are paid on deposits.
A surplus exists in the market for Barbie dolls at the prevailing price. The surplus will be eliminated by a price: a. increase, decreasing the supply and increasing the demand
b. decrease, decreasing the supply and increasing the demand. c. decrease, increasing the quantity supplied and increasing the quantity demanded. d. decrease, decreasing the quantity supplied and increasing the quantity demanded.