The reserve demand schedule is drawn on a graph that has the quantity of reserves on the horizontal axis and
a. the price level is on the vertical axis.
b. the federal funds rate is on the vertical axis.
c. the price of bonds is on the vertical axis.
d. income is on the vertical axis.
b
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A firm is producing 1,000 units of output for which the average variable cost of production equals 50 cents. The firm's total fixed costs equal $700 . The total cost of producing 1,000 units of output equals: a. $700
b. $500. c. $1,000. d. $1,200.
Refer to the diagram. A decline of aggregate supply from AS LR1 to AS LR2 , followed by a decline of aggregate demand from AD 1 to AD 2 , would best describe the:
A. direct relationship between aggregate supply and aggregate demand.
B. real-business-cycle view of recession.
C. monetarist view of recession.
D. mainstream, Keynesian-based view of recession.