In the short run, if current output remains persistently above ...

[pragya sharda]

In the short run, if current output remains persistently above potential ________.
 
  A) inflation will rise causing a movement along the aggregate supply curve
  B) expected inflation will rise causing an upward shift of the aggregate supply curve
  C) the aggregate supply curve will shift until current output returns to its potential level
  D) all of the above
  E) none of the above

Question 2

Assuming that money demand is completely interest insensitive, the
 
  a. LM schedule will be horizontal.
  b. LM schedule will be vertical.
  c. IS schedule is vertical.
  d. IS schedule is horizontal.

[milbourne11]

Answer to Question 1

D

Answer to Question 2

B

[pragya sharda]

Thank you

[milbourne11]

No problemo