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Author Question: Refer to Figure 15-7. Suppose the Fed sells Treasury Bills in pursuit of contractionary monetary ... (Read 53 times)

storky111

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on: Jun 29, 2018
Refer to Figure 15-7. Suppose the Fed sells Treasury Bills in pursuit of contractionary monetary policy. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
 
  A) B to C. B) B to D. C) C to B. D) C to D. E) A to B.

Question 2

Comment on the following statement: In economics, investment means a wide variety of things including purchases of stocks, bonds, and other financial assets.
 
  What will be an ideal response?


whitcassie

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Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

The statement is false. In economics, investment refers only to an increase in capital. Purchasing stocks or bonds is a form of saving.


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