Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C
B. Falling; A; C
C. Falling; A; B
D. Rising; A; C
Answer: D
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The real business cycle theory is based on all of the assumptions below EXCEPT
A) flexible wages. B) flexible prices. C) pure competition. D) small menu costs.
In a diagram showing the average total cost and average variable cost curves, the minimum point of the average total cost is
A) at the same level of output as the maximum of the total product curve. B) at a lower level of output than the minimum point of the average variable cost. C) at a larger level of output than the minimum point of the average variable cost. D) at the same level of output as the minimum point of the average variable cost.
The euro is said to be selling at a ________ if the spot dollar price is $1.18 and the nine-month forward rate is $1.16
A) forward discount B) forward premium C) forward spread D) none of the above
Keynes argued that when interest rates were high relative to some normal value, people would expect bond prices to ________, so the quantity of money demanded would ________
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase