Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
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Many researchers blame the severity and length of the Great Depression on the breadth and depth of government interference in private market affairs
Indicate whether the statement is true or false
The figure below shows an IS-LM-FE model for an economy with fixed exchange rates. Initially the economy is at Point A, a triple intersection. Here, the FE curve is steeper than the LM curve.
If monetary authority is unable to sterilize, output will end up
A. at Y0. B. to the left of Y1. C. to the right of Y1. D. at Y1.
The transactions demand for money is most closely associated with which of the following functions of money?
A. Standard of value. B. Standard of deferred payment. C. Store of value. D. Medium of exchange.
Frito Lay experienced a 20% drop in its sales. Even though the demand for its product decreased, Frito Lay did not cut the wages of its nonunionized workers. This is an example of
A. an implicit or social contract not to cut wages. B. an explicit contract not to cut wages. C. poor management. D. employment-at-will.