Suppose the U.S. economy is operating at potential output. A negative supply shock that is accommodated by an open market purchase by the Federal Reserve will cause ________ in real GDP in the long run and ________ in inflation in the long run, everything else held constant.

The financial and opportunity costs consumers pay when looking for a good or service:

a. supply shock b. shortage c. excess supply d. disequilibrium e. search costs

In the recent Global Economic Crisis, the negative wealth effect from a 50 percent decline in the stock market caused

A) LM curve to shift to the right. B) LM curve to shift to the left. C) IS curve to shift to the left. D) LM curve to shift to the right.