Aggregate price level, P P₂ P₁ E₁₁ LRAS SRAS AD₂ AD₁ Y₁ YE-potential Real GDP output Refer to Figure: Monetary Policy I. If the economy is initially in equilibrium at E2 and the central bank chooses to sell Treasury bills shift to a(n) gap. AD₂ will; AD₁, causing; recessionary AD₁ will; AD2, closing; recessionary AD₁ will; the left, increasing; recessionary AD₂ will; the right, causing; inflationary

Aggregate price level, P P₂ P₁ E₁₁ LRAS SRAS AD₂ AD₁ Y₁ YE-potential Real GDP output Refer to Figure: Monetary Policy I. If the economy is initially in equilibrium at E2 and the central bank chooses to sell Treasury bills shift to a(n) gap. AD₂ will; AD₁, causing; recessionary AD₁ will; AD2, closing; recessionary AD₁ will; the left, increasing; recessionary AD₂ will; the right, causing; inflationary

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following statements is false? a. The exchange equation assumes that velocity is constant. b. Velocity is the average number of times a dollar is spent to buy final goods and services in a year. c. The simple quantity theory of money predicts that changes in the money supply lead to strictly proportional changes in the price level. d. In the simple quantity theory of money the aggregate supply curve is vertical.
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