Figure 14-2
If the Fed anticipates that the conditions illustrated by AD1 and SRAS in will be present in the near future, it should
a.
shift to a more restrictive policy.
b.
shift to a more expansionary policy.
c.
request that Congress raise tax rates.
d.
refuse to buy any more U.S. securities.
b
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Refer to the diagram. An increase in quantity supplied is depicted by a:
A. move from point y to point x.
B. shift from S 1 to S 2 .
C. shift from S 2 to S
D. move from point x to point y.
Which of the following statements is an example of positive economic analysis?
A. The elderly live on a fixed income, so the government has an obligation to keep inflation rates low. B. The government should worry less about inflation and more about unemployment. C. The inflation rate is too high. D. If the government increases the rate of growth of the money supply, the inflation rate will increase, ceteris paribus.