The discovery and dissemination of a new cost-saving technology
a. is an example of a positive demand shock
b. would cause the long-run AS curve to shift leftward, thereby increasing both output and the price level
c. would increase firms' unit costs
d. would lead to an increase in output and a decrease in the price level
e. is an example of a negative supply shock
D
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When there is a threat of inflation in the economy, the Fed can ________ the federal funds rate so as to ________ aggregate demand and ________ the price level
A) lower; increase; decrease B) raise; decrease; increase C) lower; increase; increase D) raise; decrease; decrease E) raise; increase; decrease
An autonomous monetary policy easing temporarily ________ real interest rates and ________ aggregate output in the short run, but in the long run real interest rates and aggregate output return to the equilibrium levels
A) reduces; raises B) reduces; lowers C) increases; lowers D) increases; raises
Decisions by depositors to increase their holdings of ________, or of banks to hold ________ will result in a smaller expansion of deposits than the simple model predicts
A) deposits; required reserves B) deposits; excess reserves C) currency; required reserves D) currency; excess reserves
Only government restrictions serve as entry barriers.
Answer the following statement true (T) or false (F)