Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3, what changes in the market would result in an economically efficient output?
A) The quantity supplied would decrease, the quantity demanded would increase, and the equilibrium price would decrease.
B) The price would decrease, quantity demanded would increase, and quantity supplied would decrease.
C) The price would decrease, the quantity supplied would increase, and the quantity demanded would decrease.
D) The price would decrease, the demand would increase, and the supply would decrease.
B
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According to the quantity theory of money, the inflation rate equals
A) real output minus the money supply. B) the growth rate of the money supply minus the growth rate of real output. C) the growth rate of real output minus the growth rate of the money supply. D) the money supply minus real output.
What is the difference between defensive and dynamic open market operations?
What will be an ideal response?