In the above figure, the long-run equilibrium real GDP is
A) $10 trillion. B) $11 trillion. C) $12.trillion D) not displayed.
B
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A decrease in interest rates by the Fed based on a given and unchanged policy reaction function represents a ________ the aggregate demand curve, and lower interest rates resulting from a downward shift in the Fed's policy reaction function represents a ________ the aggregate demand curve.
A. movement down; shift right of B. shift left of; shift right of C. movement up; movement down D. shift left of; movement up
Interest rate fluctuations
A) are usually not considered to be of much importance and are largely ignored by the Fed. B) have the paradoxical effect of increasing the rate of economic growth. C) make it difficult for households and firms to plan for the future. D) have largely been eliminated by the Fed during the past two decades.
According to the above figure, if the firm is earning zero economic profits, what quantity is the firm selling and at what price?
A) Q = 200; P = $4 B) Q = 1,000; P = $5 C) Q = 800; P = $4 D) Q = 1,200; P = $7
The short-run supply curve for a competitive firm is the:
A. segment of the AVC curve lying to the right of the MC curve. B. segment of the MC curve lying above the AVC curve. C. entire MC curve. D. segment of the MC curve lying below the AVC curve.