Question 1
Figure 17-1
Refer to Figure 17-1. Suppose that the economy is currently at point A, and the unemployment rate at A is the natural rate. What policy would the Federal Reserve pursue if it wanted the economy to move to point C in the long run?
◦ Buy treasury bills.
◦ Sell treasury bills.
◦ Lower the discount rate.
◦ Increase the money supply.
◦ No policy will move the economy to point
C in the long run.
Question 2
Figure 17-1
Refer to Figure 17-1. Suppose that the economy is currently at point A on the short-run Phillips curve in the figure above, and the unemployment rate at A is the natural rate. If the economy was to move to point B, which of the following must be true?
◦ The economy is producing a level of GDP equal to potential GDP.
◦ Aggregate demand must have increased.
◦ Equilibrium GDP at point
B must be below potential GDP.
◦ The Fed conducted expansionary policy to cause the move.
◦ The Fed purchased treasury bills to cause the move.
(A) Figure illustrating the location and appearance of a peptic ulcer in both the stomach and the du
Caravaneer on a camel, China. Tang dynasty, (618–907). Polychrome terra-cotta figure.
Creating a Continental Economy
Figure 2.15.jpg
A Short List of Human X-Linked Recessive and X-Linked Dominant Traitsa