If cost-push inflation occurs and the government adopts a "hands-off" policy approach, then according to the simple extended AD-AS model, in the long run the economy will:

If the Fed tries to prevent the U.S. dollar exchange rate from rising, the Fed ________ U.S. dollars, ________ foreign currency, and U.S. official reserves ________

A) sells; buys; decrease B) sells; sells; increase C) buys; buys; increase D) sells, buys; increase E) buys; sells; increase

What effect will an increased demand for housing in the suburbs of a major city have on the cost of vegetable farming in the suburbs?

A) No effect, since one cannot grow vegetables on land on which housing has been constructed. B) The cost will decline because only very fertile land will now be used for growing vegetables. C) The cost will rise because it will become more expensive to grow vegetables. D) The cost won't change, because there has been no change in physical conditions. E) We cannot predict unless we know what has happened to the demand for vegetables.