If the average interval between firms' price adjustments is relatively long
A) an increase in aggregate demand will cause a relatively short-lived increase in real GDP.
B) an increase in aggregate demand will cause a relatively long-lived increase in real GDP.
C) a reduction in aggregate demand will cause a relatively short-lived reduction in real GDP.
D) none of the above.
B
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Which of the following statements is TRUE?
A) An increase in the price of gasoline will decrease the demand for gasoline. B) An increase in the price of gasoline will increase the quantity demanded of gasoline. C) An increase in the price of gasoline will increase the supply of gasoline. D) An increase in the price of gasoline will increase the quantity supplied of gasoline.
Assume a fixed demand for money curve and the Fed increases the money supply. In response, people will:
a. sell bonds, thus driving up the interest rate. b. sell bonds, thus driving down the interest rate. c. buy bonds, thus driving up the interest rate. d. buy bonds, thus driving down the interest rate.