The Great Depression was an era marked by
a. steady growth in GDP and a decline in the rate of unemployment.
b. a prolonged period of high unemployment and output substantially below its potential.
c. a large decline in the stock market followed by a steady recovery.
d. a failure of expansionary monetary policy to stimulate output and employment.
B
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The tables above show the marginal costs and benefits from production of paper. The efficient level of output is ________ of paper
A) 1,600 tons B) 2,400 tons C) 3,200 tons D) 4,000 tons
Refer to Figure 12.2. Suppose the economy is initially above potential GDP, and the actual inflation rate is greater than the expected inflation rate. If the Fed wants to achieve the goal of price stability, this would be represented by a
A) shift from IS1 to IS2. B) shift from IS2 to IS1. C) shift from MP1 to MP2. D) shift from MP2 to MP1.