Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A
B. Falling; A; C
C. Falling; B: C
D. Rising; A; C
Answer: B
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A mixed economy is one that combines both public and private ownership of property.
Answer the following statement true (T) or false (F)
If the government accelerates money supply growth and enlarges the budget deficit to stimulate aggregate demand, the rational expectations hypothesis indicates that decision makers will:
a. ignore the policy until it exerts an observable impact on prices, output, and employment. b. quickly take steps to adjust their decision making in light of the more expansionary policies. c. be fooled at the outset but eventually adjust their decision making in accordance with the change in policy. d. be unaware that this policy change has been implemented until a higher rate of inflation is observed.
Many economists believe that in our modern economy, firm size is most directly determined by
a. concentration ratios that decrease as the number of firms decreases b. diseconomies of scale that make it less costly to increase firm size c. easy entry of new firms when there are economies of scale d. government policies that dictate optimal firm investment levels e. modern technology that gives an advantage to large-scale production methods
One cost that potentially could result from central banks targeting money growth is:
A. volatile interest rates. B. decreased independence. C. high inflation. D. a slowdown in financial innovation.