Author Question: In long-run full-employment equilibrium, which of the following is true? a. The CPI equals AD ... (Read 81 times)

viki · **on:** Jun 30, 2018

In long-run full-employment equilibrium, which of the following is true?
a. The CPI equals AD equals the peak of the production function curve.
b. The horizontal LRAS curve equals the intersection of the demand and supply curves inthe labor market.
c. The CPI equals the aggregate production function at the equilibrium wage rates.
d. The CPI equals AD equals SRAS equals LRAS.

Question 2

Suppose a bank has checkable deposits of 100,000 and the required reserve ratio is 20 percent. If the bank currently has 100,000 in reserves, it could expand the money supply by as much as:
a. 100,000.
b. 400,000.
c. 0.
d. 20,000.
e. 80,000.