Assume the central bank decides to pursue contractionary monetary policy. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real goods market with aggregate demand shifting to the right.
b. Start the analysis in the real credit market with demand for real credit shifting to the left.
c. Start the analysis in the real credit market with demand for real credit shifting to the right.
d. Start the analysis in the real credit market with supply of real credit shifting to the left.
e. Start the analysis in the real credit market with supply of real credit shifting to the right.
.D
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In general, the labor supply curve
A) is perfectly elastic at the equilibrium wage rate. B) is vertical at the equilibrium wage rate. C) slopes upward because as the wage rises the opportunity cost of leisure increases. D) slopes downward because firms will hire fewer workers at higher wages.
According to the law of demand, if the price of a good increases, other things being equal, the quantity demanded will decrease
a. True b. False Indicate whether the statement is true or false
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Table 35.1CountryTons of SoybeansComputerChina100300United States150750Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The output of computers and soybeans would be greatest if
A. China specialized in producing computers, while the United States specialized in producing soybeans. B. Both countries prohibited trade. C. The United States produced both goods and exported them to China. D. China specialized in producing soybeans, and the United States specialized in producing computers.