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Unformatted text preview: the price level 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. is lower and output is the same as the original long‐run equilibrium. d. is the same and output is lower than in the original long‐run equilibrium. 27. Which of the following will reduce the price level and real output in the short run? a. an increase in the money supply b. an increase in oil prices c. a decrease in the money supply d. technical progress 28. If the Federal Reserve decided to lower interest rates, it could a. buy bonds to lower the money supply. b. buy bonds to raise the money supply. c....
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This test prep was uploaded on 02/19/2014 for the course ECON 252 taught by Professor Robertholand during the Fall '08 term at Purdue.

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