Changes in the growth rate of the velocity of money can't permanently shift the AD curve because:
A. in the long run, the inflation rate is determined by the money supply growth rate.
B. in the long run, the inflation rate is determined by the growth rate of the velocity of money.
C. in the long run, the inflation rate will be equal to the Solow inflation rate.
D. changes in the growth rate of the velocity of money shift the SRAS curve, not the AD curve.
Ans: A. in the long run, the inflation rate is determined by the money supply growth rate.
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A merger between firms at different stages of production of a good
A) was made illegal by the Sherman Act. B) was made legal by the Clayton Act. C) is a vertical merger. D) is a horizontal merger.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.