If Weak Aggregate Demand Is Pushing the Economy into Recession,which

question 151

Multiple Choice

If weak aggregate demand is pushing the economy into recession,which of the following must be true?

• A)The economy is at an equilibrium that is on the long-run aggregate supply curve.
• B)The economy is at an equilibrium that is on the long-run Phillips curve.
• C)The economy is at an equilibrium that is not on the long-run Phillips curve.
• D)Contractionary monetary policies will push the economy back to the long-run Phillips curve.

---

Definitions:

Closed-end Funds

Investment funds that have a fixed number of shares which are not redeemable from the fund. Instead, the shares can be purchased or sold only in the market, at their current market price.

Unit Investment Trusts

An investment company offering a fixed portfolio of securities in a one-time public offering, with units redeemable on demand.

Short-selling

The practice of selling securities or other financial instruments that are not currently owned, with the intention of repurchasing them later at a lower price.

120/20 Fund

A type of mutual fund that employs a long/short strategy, allowing it to invest 120% in long positions and -20% in short positions.