Assume that the economy is in long-run equilibrium. A shift in the aggregate demand curve will change
A) only the price level in the long run
B) only the output level in the long run
C) both the price level and the output level in the long run
D) neither the price level nor the output level in the short run
E) only the price level in the short run and only the output level in the long run
Ans: A) only the price level in the long run
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Refer to the above figure. If an individual firm wants to maximize economic profits, it should
A) charge $5 for its product. B) charge more than $5 for its product since increasing the price will increase revenues. C) charge less than $5 for its product since a lower price will attract more customers. D) withdraw its product from the market forcing the market price up.
The voting members of the Open Market Committee are
a. the 7 Governors of the Federal Reserve System. b. the 12 presidents of the Federal Reserve Banks. c. the 7 Governors and the Chairman of the Council of Economic Advisors. d. the 7 Governors and 5 of the presidents of the 12 regional Federal Reserve Banks.