Assuming the aggregate supply curve is upward-sloping, which of the following is most likely to occur if the Fed pursues restrictive monetary policy?
A. The equilibrium output will decrease but the price level will stay the same.
B. The equilibrium price level and output will both decrease.
C. The equilibrium price level and output will both increase.
D. The equilibrium price level will decrease but output will stay the same.
Answer: B
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A firm experiences increasing returns to scale; that is, doubling all its inputs more than doubles its output. What can be inferred about the firm's short-run costs?
What will be an ideal response?
A citizen in a developing country with a currency policy of convertibility on the current account could engage in all of the following transactions except:
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