Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2.
B. P3 and Y1.
C. P2 and Y2.
D. P2 and Y3.
Answer: D
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A cottage industry exists in the home-manufacture of ‘country crafts'. Especially treasured are handmade quilts. If the fourth completed quilt took 30 hours to make, and the eighth quilt took 28 hours. What is the percentage learning?
a. 5% b. 6.7% c. 10% d. 100% e. 122%
Why does the Fed have imperfect control over the money supply?
a. Because the Fed does not know how much reserves will change when it buys or sells securities. b. Because of unpredictable changes in the public's desire to hold cash and banks' desires to hold reserves. c. Because of unpredictable changes in reserve requirements. d. Because of the secrecy of FOMC meetings, which lead to policy surprises.
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a. Recognition Lag b. Decision-Making Lag c. Implementation Lag d. Effectiveness Lag
Command-and-control policies:
A. allow a low-cost firm to abate more pollution. B. encourage firms to develop more efficient abatement technologies. C. usually result in relatively low compliance costs. D. allow us to predict the total amount of pollution that will be discharged.