Refer to the above figure. Unexpected expansionary monetary policy has caused the aggregate demand curve to shift to AD2. In the long run
A) real GDP will be Y1, and the price level will be above P2.
B) real GDP will be between Y1 and Y2, and the price level will be between P1 and P2.
C) real GDP will be Y2, and the price level will be P2.
D) real GDP will be Y1, and the price level will be P1.
A
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If the actual reserve/deposit ratio equals 15% and the desired reserve/deposit ratio for this bank is 10%, the bank should:
A. stop making loans. B. make more loans in order to earn interest. C. do nothing because this is a profitable situation. D. request that customers withdraw deposits from the bank.
Of the following assets, the least liquid is
A) stocks. B) traveler's checks. C) checking deposits. D) a house.
Moral hazard is the
A) outcome of a Prisoner's Dilemma. B) result of market signaling. C) risk associated with a Dutch auction. D) risk that one party to a contract may alter its post-contract behavior to the detriment of another party.
A procedure in which two groups are compared based on whether they were part of an initially specified random sample subjected to an experimental protocol is called
A. difference-in-differences. B. regression discontinuity. C. causality. D. intention to treat.