Shifts in the IS curve ________ the AD curve, and changes to the reaction function ________ the AD curve
A) cause a movement along; shift
B) shift; cause a movement along
C) temporarily shift; permanently shift
D) permanently shift; temporarily shift
C
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The money demand curve will shift to the right if:
A. ATM machines are introduced. B. real income increases. C. the nominal interest rate increases. D. the price level decreases.
One of the problems that monetary unions eliminate is
a. inflationary gaps. b. recessionary gaps. c. exchange rate instability. d. business cycles.
The deadweight loss that is associated with a monopolistically competitive market is a result of
a. price falling short of marginal cost in order to increase market share. b. price exceeding marginal cost. c. the firm operating in a regulated industry. d. excessive advertising costs.
Refer to the figure. If the Federal funds market is at equilibrium at point B and the Federal Reserve decides to change the rate by a percentage point in order to reduce the chances of the economy going into recession, the supply of funds curve will have to shift to:
A. Sf1
B. Sf2
C. Sf3
D. Sf4