Refer to Figure 15-12. In the dynamic AD-AS model, the economy is ...

[elizabeth18]

Refer to Figure 15-12. 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) potential real GDP levels lower 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) real GDP levels higher than what would occur if no policy had been pursued.
  D) unemployment rates higher than what would occur if no policy had been pursued.

Question 2

Emily is a writer. She buys pens and paper for 20 and writes a 500-page novel that she sells to a publishing company for 500,000. If the publisher prints 1 million copies that sell for 25 each, what is the contribution to GDP of Emily's novel?
 
  A) 25 million B) 20 million C) 500,000 D) 50,000

[Anton]

Answer to Question 1

D

Answer to Question 2

A

[elizabeth18]

Excellent

[yeungji]

TYSM