Long-run equilibrium will occur at the price level at which
A. the long-run aggregate demand and short-run aggregate supply curves intersect.
B. the aggregate demand and long-run aggregate supply curves intersect.
C. the aggregate demand and short-run aggregate supply curves intersect.
D. the short-run aggregate supply and long-run aggregate supply curves intersect.
Answer: B
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A price ceiling will be binding only if it is set
a. equal to the equilibrium price. b. above the equilibrium price. c. below the equilibrium price. d. either above or below the equilibrium price.
Suppose the Fed conducts an open market purchase of bonds. This monetary policy action will tend to cause
A. the price of bonds to decrease, and the interest rate to increase. B. the price of bonds to increase, and the interest rate to increase. C. the price of bonds to decrease, and the interest rate to decrease. D. the price of bonds to increase, and the interest rate to decrease.