In the long run, the price level in an economy is determined ...

[evelyn o bentley]

In the long run, the price level in an economy is determined solely by:
 a. the long-run aggregate supply curve.
 b. the aggregate demand curve.
 c. the amount of cyclical unemployment in the economy.
  d. the short-run aggregate supply curve.
 e. the potential output level.

Question 2

When the Fed decreases the money supply:
 a. aggregate demand and aggregate supply both increase.
 b. aggregate demand increases, which leads to movement along the short-run aggregate supply curve.
  c. aggregate demand decreases, which leads to movement along the short-run aggregate supply curve.
  d. aggregate supply increases, which leads to movement along the aggregate demand curve.
 e. aggregate supply decreases, which leads to movement along the aggregate demand curve.

[macagnavarro]

Answer to Question 1

b

Answer to Question 2

c