In the above figure, the economy is initially at point B. If the Fed decreases the quantity of money, there is
A) a movement to point C.
B) a movement to point A.
C) a shift to AD2.
D) a shift to AD1.
C
You might also like to view...
Do you agree or disagree with the following statement: "If, in the neoclassical model of decision making, the discount factor changes over time, the predictions of the beta-delta model could be mimicked in the neoclassical model." Explain.
What will be an ideal response?
A fall in the price of a good causes an increase in its:
A. quantity demanded. B. demand. C. quantity supplied. D. supply.
Refer to the following graph.
If this country is producing between point G and Q, it will gain by ________ its production of good A and importing more ________.
A. increasing; good B B. decreasing; good B C. increasing; good A D. decreasing; good A
Suppose the reserve requirement is 5 percent. If reserves fall by 100, the money supply will decline by:
A. 100. B. 200. C. 1,000. D. 2,000.