After a shift from AD0 to AD1, which of the following patterns of adjustment is consistent with the Lucas model?
A) A to B to E
B) A to F to E
C) A to C to E
D) A to C to A
C
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Which of the following statements is not true with regard to repurchase agreements?
A) In a typical repo, an entity sells government securities and agrees to repurchase them at a higher price the next day. B) A reverse RP involves borrowing funds overnight. C) The repo market has evolved into maturities ranging from one day to three months. D) In practice, a repo is used to raise funds for anything the borrower chooses.
Suppose over some period of time the money supply tripled, velocity doubled, and real GDP doubled. According to the quantity equation the price level is now
a. 6 times its old value. b. 3 times its old value. c. 1.5 times its old value. d. 0.75 times its old value.
The AD curve will shift when there is a change in:
A. the inflation rate or the money growth rate. B. the money growth rate or the velocity growth rate. C. the real growth rate or the inflation rate. D. the velocity growth rate or the real growth rate.
Which of the following is not a possible source of last-minute reserves for a private bank?
A. Selling bonds. B. Borrowing reserves from other banks. C. Raising the discount rate. D. Borrowing reserves from the Federal Reserve System.