In the above figure, if we begin at S1 and the Fed sells bonds
A. the price of bonds falls, and the interest rate rises.
B. the price of bonds rises, and so does the interest rate.
C. the price of bonds falls, and so does the interest rate.
D. the price of bonds rises, and the interest rate falls.
Answer: A
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All items below will decrease short-run aggregate supply EXCEPT
A) a decrease in labor supply. B) a decrease in training and education. C) a decrease in the marginal tax rates. D) an increase in the prices of inputs.
The absolute price of a commodity is the amount of
a. other goods that must be sacrificed in order to purchase one unit of the commodity. b. resources required to produce one unit of the commodity. c. currency needed to purchase one unit of the commodity. d. time and effort used to develop a market for the buying and selling of the commodity.