Which of the following will most likely occur in the short run if long-run equilibrium is disturbed by an unanticipated decrease in aggregate demand?
What will be an ideal response?
a decrease in output and a lower price level
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Fiscal policy is determined by
A) Congress and the Federal Reserve. B) Congress and the president. C) the president and the Federal Reserve. D) the Federal Reserve.
In 2012, direct government purchases equaled ________ percent of federal outlays
A) 42 B) 71 C) 26 D) 55
In the years following the Civil War, the world supply of cotton ____________ and the world demand for cotton _____________
a. increased; also increased b. decreased; also decreased c. increased; decreased d. decreased; increased
Banca Solida has, in the past, always operated with a reserve ratio of 25 per cent. It has now been taken over by Gung-Ho Bank which operates with a reserve ratio of 12 per cent. Assuming that Banca Solida adopts the business practices of its new owner, what will be the effect on money supply in the country in which Banca Solida operates?
a. Money supply will increase because Banca Solida will increase its loans. b. The effect on money supply cannot be determined from the information given. c. Money supply will decrease because the loans will have to be repaid. d. Money supply will be unchanged because the central bank has made no policy changes.