In long-run full-employment equilibrium, the CPI equals AD equals SRAS equals LRAS.

In long-run full-employment equilibrium, the CPI equals AD equals SRAS equals LRAS.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 2

In a simplified banking system with a 20 percent required reserve ratio, a 1,000 open-market sale by the Fed would cause the money supply to:
 a. increase by 200 b. decrease by 200.
  c. decrease by 5,000 d. increase by 5,000.

QUESTION 3

A country with a high GDP per capita can be classified as an industrially advanced country (IAC) regardless of its industrial development.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 4

The long-run aggregate supply curve (LRAS) corresponds to full-employment real GDP with zero frictional and structural unemployment.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 5

In a simplified banking system subject to a 25 percent required reserve ratio, a 1,000 open-market purchase by the Fed would cause the money supply to:
 a. increase by 1,000 b. decrease by 1,000.
  c. decrease by 4,000 d. increase by 4,000.

QUESTION 6

Which of the following makes short-term conditional low-interest loans to LDCs?
 a. World Bank.
  b. Agency for International Development (AID).
  c. Agency for International Finance (AIF).
  d. International Monetary Fund (IMF).

QUESTION 7

The short-run aggregate supply curve (SRAS) is based on the theory that wages are flexible.
 a. True
  b. False
  Indicate whether the statement is true or false