At what price level does equilibrium occur in Figure 8.4?

Consider the labor market depicted in the above figure. The competitive equilibrium would be for ________ hours of employment

A) 200 B) 400 C) 600 D) None of the above answers is correct.

Assume the central bank decides to pursue contractionary monetary policy. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?

a. Start the analysis in the real goods market with aggregate demand shifting to the right. b. Start the analysis in the real credit market with demand for real credit shifting to the left. c. Start the analysis in the real credit market with demand for real credit shifting to the right. d. Start the analysis in the real credit market with supply of real credit shifting to the left. e. Start the analysis in the real credit market with supply of real credit shifting to the right.