Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply.
B. a reduction in aggregate demand.
C. an increase in long-run aggregate supply.
D. an increase in aggregate demand.
Answer: B
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People in other countries want to hold U.S. dollars as a
A) medium of exchange. B) store of value. C) unit of account. D) standard of deferred payment.
The economy is in long-run equilibrium when ________ and ________
A) real GDP equals potential GDP; the unemployment rate equals zero B) the output gap equals zero; the inflation rate equals the target inflation rate and the expected inflation rate C) the output gap is at its maximum; the inflation rate equals the target inflation rate and the expected inflation rate D) the unemployment rate equals the natural rate of unemployment; the inflation rate equals zero