When the economy suffers a permanent negative supply shock and the central bank does not respond by changing the autonomous component of monetary policy, then
A) inflation will be lower.
B) output will be at its potential.
C) output will be lower.
D) inflation will not change.
E) both A and B.
C
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We observe a shortage in real life when we see
A) nonmoney costs of acquiring a good increasing. B) people unable to purchase as much as their situation requires. C) prices falling. D) the amount purchased is less than the amount supplied.
When the Treasury acquires gold or SDRs, it issues certificates to the ________, which are a claim on the gold or SDRs, and in turn is credited with deposit balances at the ________
A) Federal Reserve System; Fed B) Federal Reserve System; IMF C) International Monetary Fund; Fed D) International Monetary Fund; IMF
According to the graph shown, at a price of $15, there is a:
A. shortage of 10.
B. shortage of 20.
C. shortage of 30.
D. surplus of 20.
The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by
a. unstable economic conditions in Eastern Europe. b. increased competition from abroad. c. a decline in the rate of increase in U.S. productivity. d. a strong U.S. dollar abroad, hurting U.S. exports.