Interest rates in the economy have risen. How will this affect aggregate demand and equilibrium in the short run?
A) Aggregate demand will rise, the equilibrium price level will fall, and the equilibrium level of GDP will rise.
B) Aggregate demand will fall, the equilibrium price level will rise, and the equilibrium level of GDP will fall.
C) Aggregate demand will fall, the equilibrium price level will fall, and the equilibrium level of GDP will fall.
D) Aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise.
Ques. 2Which of the following would decrease the current account balance of the United States?
A) a decrease in the amount of money the U.S. government sends in foreign aid to other countries
B) a decrease in imports
C) a decrease in the amount of income U.S. companies pay out to foreigners who own investments in the U.S.
D) a decrease in the balance of trade
Ques. 3Refer to Figure 26-12. In the dynamic AD-AS model, the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues policy. This will result in
A) real GDP levels higher than what would occur if no policy had been pursued.
B) inflation rates higher than what would occur if no policy had been pursued.
C) potential real GDP levels lower than what would occur if no policy had been pursued.
D) unemployment rates higher than what would occur if no policy had been pursued.
Ques. 4Refer to Table 19-30. Based on the table above, what is personal income for this economy?
A) 1,950 billion B) 2,030 billion C) 2,450 billion D) 5,130 billion
Ques. 5When banks gain ________, they can ________ their loans; and the money supply ________.
A) withdrawals; increase; expands B) reserves; increase; expands
C) withdrawals; decrease; expands D) reserves; increase; contracts
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