Refer to the graphs, in which the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve. All figures are in billions. The economy is at point Y on the investment demand curve. Given these conditions, what policy should the Fed pursue to achieve a noninflationary full-employment level of real GDP?
A. Increase aggregate demand from AD3 to AD2
B. Decrease the money supply from $225 to $150 billion
C. Increase interest rates from 4 to 8 percent
D. Make no change in monetary policy
D. Make no change in monetary policy
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Refer to the scenario above. If the cost of advertising is negligible, what will the outcome of this game be?
A) Company A will advertise its products while Company B will not advertise. B) Company B will advertise while Company A will not advertise. C) Both the companies will advertise their products. D) Neither of the companies will advertise its products.
If the government establishes a target price of $5, how much will the total deficiency payment to farmers be?
a. $3000 million b. $1500 million c. $750 million d. none, no deficiency payment will be necessary