Suppose there is a decrease in short-run aggregate supply. If the Federal Reserve wants to stabilize output it should
a. buy bonds. These purchases also move the price level closer to its original level.
b. buy bonds. However these purchases move the price level farther from its original level.
c. sell bonds. These purchases also move the price level closer to its original level.
d. sell bonds. However these purchase move the price level farther from its original level.
b
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A decrease in supply will have what effect on equilibrium price and quantity?
A. Price will increase; quantity will decrease. B. Price will decrease; quantity will increase. C. Both price and quantity will increase. D. Both price and quantity will decrease.
The circular flow model shows the
A) distribution of income and consumption goods across income levels. B) combinations of the factors of production needed to produce goods and services. C) flow of expenditure and incomes that arise from the households', firms', and governments' decisions. D) flow of natural resources from firms to the private market to government and back to firms. E) distribution of income to the different factors of production.
George Gnat subscribes to a monthly pest control service for his home
Last week the owner of the service informed George that he will have to raise his monthly service fee because of increases in the price of gasoline used by his workers on their service trips. How is the market for pest control services affected by this? A) There is a decrease in the demand for pest control services. B) There is a decrease in the supply of pest control services. C) There is a decrease in the quantity of pest control services supplied. D) There is an increase in the supply of pest control services.
If the simple spending multiplier is 8, the marginal propensity to consume (MPC) is
What will be an ideal response?