In the long run, a leftward shift of the aggregate demand curve ...

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In the long run, a leftward shift of the aggregate demand curve will lead to a(n):
 a. increase in equilibrium output but will not change the price level in an economy.
 b. increase in the price level as well as the equilibrium output in an economy.
 c. decrease in the price level but will leave the equilibrium output unchanged in an economy.
  d. increase in the price level but will leave the equilibrium output unchanged in an economy.
  e. decrease in the price level as well as the equilibrium output in an economy.

Question 2

Which of the following changes is observed when the Fed increases the federal funds rate?
 a. Inflation is brought to an immediate halt.
 b. The inflation rate increases for several months, but then begins to decrease.
 c. Major banks try to offset this change by lowering the interest rates they charge on loans.
 d. Major banks try to offset this change by lowering the interest rates they pay on savings deposits.
  e. Major banks raise the prime interest rate that they charge to their best customers.

[lkanara2]

Answer to Question 1

c

Answer to Question 2

e

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Gracias!

[ghepp]

Excellent