Which of the following will most likely increase aggregate demand?

Refer to Figure 14.3. Suppose the economy is initially at long-run equilibrium and the Fed increases the target inflation rate, and to hit this rate, it must reduce the real interest rate. The economy then reaches a new, short-run equilibrium point

Assuming expectations are adaptive, the next movement is best represented as a movement from A) point C to point B. B) point C to point A. C) point D to point C. D) point B to point C.

When oligopolistic firms in an industry form a cartel, then it is most likely that

A) both industry output and prices will increase. B) both industry output and prices will decrease. C) industry output will increase while prices will decrease. D) industry output will decrease while prices will increase.