Look at the above figure. Suppose the economy was initially in equilibrium at point A. What point would represent the short-run equilibrium if the Fed makes an open market purchase of bonds?

A PPF can

A) shift outward but not inward. B) shift inward but not outward. C) shift inward or outward. D) shift neither inward nor outward.

Joan purchases a beautiful rug for $25,000. After several years of wear and tear, Joan has the rug appraised and finds that it is now worth only $20,000. Based on this information:

A. Joan's wealth is unchanged. B. Joan has a $5,000 capital gain. C. Joan has a $5,000 capital loss. D. Joan's saving this year has increased by $5,000.