Refer to Figure 13-3. Suppose the economy is at point A. If the economy experiences a supply shock, where will the eventual short-run equilibrium be?

In conducting quantitative easing, the Fed may decide to purchase mortgage securities to do all of the following EXCEPT:

A. affect long-term interest rates. B. influence average home prices. C. reduce interest rates on home purchases. D. increase the amount of bank reserves.

Monopoly is a market structure in which:

a. there are significant barriers to the entry of new firms. b. the firms face a perfectly elastic demand curve. c. there are a large number of close substitutes for the good produced. d. a homogeneous product is sold. e. the firms are price takers.