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hw9 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. An economic contraction caused by a shift in aggregate demand remedies itself over time as the expected price level a. rises, shifting aggregate demand right. b. rises, shifting aggregate demand left. c. falls, shifting aggregate supply right. d. falls, shifting aggregate supply left. Consider the exhibit below for the following questions. Figure 33-1 2. Refer to Figure 33-1. An increase in the money supply would move the economy from C to a. B in the short run and the long run. b. D in the short run and the long run. c. B in the short run and A in the long run. d. D in the short run and C in the long run. 3. Refer to Figure 33-1. If the economy starts at C, an increase in the money supply moves the economy a. to A in the long run. b. to B in the long run. c. back to C in the long run. d. to D in the long run. 4. Refer to Figure 33-1. If the economy is at A and there is a fall in aggregate demand, in the short run the economy a. stays at A. b. moves to B. c. moves to C. d. moves to D. 5. Refer to Figure 33-1. If the economy starts at A and there is a fall in aggregate demand, the economy moves a. back to A in the long run. b. to B in the long run. c. to C in the long run. d. to D in the long run. 6. Refer to Figure 33-1. If the economy starts at A and moves to D in the short run, the economy a. moves to A in the long run. b. moves to B in the long run. c. moves to C in the long run. d. stays at D in the long run. 7. Refer to Figure 33-1. The economy would be moving to long-run equilibrium if it started at a. A and moved to B. b. C and moved to B. c. D and moved to C. d. None of the above is correct. 8. Refer to Figure 33-1. If the economy is in long-run equilibrium, then an adverse shift in aggregate supply would move the economy from a. A to B. b. C to D. c. B to A. d. D to C. 9. Refer to Figure 33-1. In the short run, a favorable shift in aggregate supply would move the economy from a. A to B. b. B to C. c. C to D. d. D to A. 10. Suppose the economy is initially in long-run equilibrium and aggregate demand rises. In the long run prices a. and output are higher than in the original long-run equilibrium. b. and output are lower than in the original long-run equilibrium. c. are higher and output is the same as the original long-run equilibrium. d. are the same and output is lower than in the original long-run equilibrium. The Stock Market Boom of 2010 Imagine that in 2010 the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some time. 11. Refer to Stock Market Boom 2010. Which curve shifts and in which direction? ... View Full Document

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