Refer to the diagram. If the full-employment level of GDP is B and aggregate expenditures are at AE 3 , the:
A. inflationary expenditure gap is BC.
B. recessionary expenditure gap is BC.
C. recessionary expenditure gap is ed.
D. inflationary expenditure gap is ed.
C. recessionary expenditure gap is ed.
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The expectation of a lower inflation rate will cause: a. the short-run Phillips curve to become vertical
b. the short-run Phillips curve to shift leftward. c. a movement down along a short-run Phillips curve. d. the short-run Phillips curve to shift rightward.
The economy is initially in long-run equilibrium. Expectations are adaptive, prices and wages are flexible, and there is an unanticipated increase in aggregate demand. In the short run, the price level will be __________ than it was in long-run equilibrium and Real GDP will be __________ than it was in long-run equilibrium
A) higher; lower B) lower; higher C) lower; lower D) higher; higher
Which of the following companies would gain from foreign currency depreciation?
A. Companies that borrow in foreign currency. B. Companies that export goods and services. C. Companies that invest in the foreign equity markets. D. Companies that buy bonds issued by the foreign government.
On November 20, 1985, the Bank of New York needed to use the lender of last resort function due to:
A. a rumor that the bank was about to be taken over by FDIC due to insolvency. B. a computer error caused the bank's records to wipe out the balances of all of its customers. C. a run on the bank started by a rumor that the president of the bank embezzled tens of millions of dollars from the bank. D. a computer error that made it impossible for the bank to keep track of its Treasury bond trades.