If the Federal Reserve raises interest rates in an autonomous tightening ________
A) the MP curve shifts up, there is an upward movement along the IS curve, and the AD curve shifts to the left to a lower level of equilibrium output
B) the MP curve shifts down, there is a downward movement along the IS curve and the AD curve shifts to the right to a higher level of equilibrium output
C) the MP curve shifts up, there is a downward movement along the IS curve and the AD curve shifts to the right to a lower level of equilibrium output
D) the MP curve shifts down, there is an upward movement along the IS curve and the AD curve shifts to the left to a higher level of equilibrium output
E) none of the above
A
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An unplanned increase in inventories results from
A) actual investment that is less than planned investment. B) an increase in planned investment. C) a decrease in planned investment. D) actual investment that is greater than planned investment.
Suppose the following information is known about a market:
1. Sellers will not sell at all below a price of $2. 2. At a price of $10, any given seller will sell 10 units. 3. There are 100 identical sellers in the market. Assuming a linear supply curve, use this information to derive the market supply curve.