Assume, in a competitive market, price is initially above the equilibrium level. We predict that price will:
A. increase, quantity demanded will decrease, and quantity supplied will increase.
B. decrease, quantity demanded will decrease, and quantity supplied will increase.
C. decrease, quantity demanded will increase, and quantity supplied will decrease.
D. decrease and quantity demanded and quantity supplied will both decrease.
Answer: C
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Refer to Figure 14.1. Assume that the economy is originally in equilibrium where real GDP equals potential GDP
Other things equal, an increase in the target inflation rate would best be represented as a movement from ________ in the short run and ________ in the long run. A) point Y to point X; point X to point Y B) point Y to point X; will remain at point X C) point Y to point Z; remain at point Z D) point Z to point X; point X to point Z
When the Fed buys U.S. government securities, the money supply
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What will be an ideal response?
Use the following table to illustrate the importance of macroeconomic policy coordination
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