Figure 9-1
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In Figure 9-1,
A. the 45° line represents all points where spending equals output.
B. to the left of equilibrium GDP, inventories will rise.
C. to the right of equilibrium GDP, inventories will fall.
D. the level of equilibrium GDP equals potential GDP.
Answer: A
Economics
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In the real world, contractionary monetary policy would be used to
A) combat a recession. B) reduce the rate of inflation. C) increase nominal GDP. D) increase long-run aggregate supply.
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The law of supply states that price and quantity supplied are
A) inversely related, ceteris paribus. B) directly related, ceteris paribus. C) not related. D) fixed.
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