ECON252 FINAL EXAM 04-30-2013 - BLUE (KEY)

b pointcintheshortrunandbacktothepointainthelongrun c

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Unformatted text preview: and in the short run and decrease prices of aggregate goods and services in the short run. *** B. increase the consumption demand in the short run and decrease prices of aggregate goods and services in the short run. C. increase the aggregate supply in the long run and decrease the price level in the long run. D. decrease the aggregate supply in the long run and increase the price level in the long run. 27. Which of the following events will increase the real output and the price level in the short run? A. Anopen market purchase of government securities by the Fed. *** B. An open market sale of treasury bonds by the Fed. C. An increase in the discount rates. D. An increase in the reserves ratio. [Use the following figure to answer questions 28–30.] LRAS P SRAS SRAS A C D B AD AD Y 28. Suppose the long run equilibrium is at point A. The Fed increases the discount rate. Assuming no government intervention, the economy will move to A. point C in the short run, and back to point A in the long run. B. point C in the short run, and to point B in the long run. *** C. point D in the short run, and back to point A in the long run. D. point D in the short run, and to point B in the long run. 29. Suppose the long run equilibrium is at point B. There is an adverse shock to the short run aggregate supply. Assuming no government intervention, the economy will move to A. point C in the short run and back to point B in the long run. *** B. point C in the short run and back to the point A in the long run. C. point D in the short run and back to point B in the long run. D. point D in the short run and to point A in the long run. 30. Suppose the long run equilibrium is at point B. There is an adverse shock to the short run aggregate supply. To stabilize the economy’s output and unemployment, the Fed can A. increase the money supply, so the economy moves to po...
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This test prep was uploaded on 03/03/2014 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue University.

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