If the economy experiences a negative supply shock, which of the following will be true?
A) Inflation will fall, and real GDP will fall. B) Inflation will rise, and real GDP will rise.
C) Inflation will fall, and real GDP will rise. D) Inflation will rise, and real GDP will fall.
D
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Use the following graph, which shows an aggregate demand curve, to answer the next question. 
If the price level increases from 150 to 250, the real output demanded will ________.
A. increase by $200 billion B. decrease by $200 billion C. decrease by $600 billion D. increase by $800 billion
Which of the following describes the relationship between the actual federal funds rate and that suggested by Taylor's rule following the recovery from the 2001 recession?
A) The federal funds rate was above that suggested by Taylor's rule. B) The federal funds rate was below that suggested by Taylor's rule. C) The federal funds rate was about equal to that suggested by Taylor's rule. D) There was not a clear relationship between the federal funds rate and that suggested by Taylor's rule.
If profits are reinvested in the corporation, then
A) payments made to bondholders will be less. B) there are fewer funds available to distribute to stockholders. C) the company will sell more bonds in order to pay dividends to stockholders. D) the high profits indicate that common stockholders will get larger dividends than normal.
Temporary changes in the price level caused by changes in the business cycle are called:
A. demand pull inflation. B. cost push inflation. C. demand push inflation. D. cost pull inflation.