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 credit market with supply of real credit shifting to the right.
b. Start the analysis in the real credit market with aggregate 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 left.
d. Start the analysis in the real credit market with demand for real credit shifting to the right.
e. Start the analysis in the real credit market with supply of real credit shifting to the left.
.E
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Refer to Figure 12-17. Which of the following statements is true?
A) The current market price is $3 but the firm will be able to increase the price in the future. B) The current market price is $3 but the price will fall in the long run as new firms enter the market. C) The current market price is $3 but the price will increase in the future as the market demand increases. D) The current market price is $3 but the price will fall in the long run as a result of a decrease in demand.
The calculation of real GDP allows us to
A) separate consumption and investment spending. B) adjust for underground economic activity. C) adjust for the change in the quality of output over time. D) compare national output across periods of time.