In the above figure, assume the economy starts out in equilibrium at point d. If the Fed increases the money supply so that the new aggregate demand curve is AD3, then the new short-run equilibrium will be at point

A. a.
B. b.
C. c.
D. i.

Answer: C

Economics

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Suppose a profit-maximizing firm in a competitive market produces rubber bands. When the market price for rubber bands falls below the minimum of its average total cost, but still lies above the minimum of average variable cost, in the short run the firm will

a. experience losses but will continue to produce rubber bands. b. shut down. c. earn both economic and accounting profits. d. raise the price of its product.

Economics

The Aristocrat Corporation has taken out a loan to buy manufacturing equipment. The loan represents ________ for the company

A) an asset B) a liability C) a bond D) equity

Economics