-Refer to the Above Figure

question 70

Multiple Choice

-Refer to the above figure. Unexpected expansionary monetary policy has caused the aggregate demand curve to shift to AD₂. In the short run

• A)the unemployment rate will be the same rate as before the expansionary monetary policy.
• B)the unemployment rate will be larger than the rate before the expansionary monetary policy.
• C)the unemployment rate will be smaller than the rate before the expansionary monetary policy.
• D)the unemployment rate can increase or decrease depending upon how much the LRAS will shift.

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Definitions:

Statute of Frauds

A legal principle requiring certain types of contracts to be in writing and signed by the party to be charged with the contract, in order to be enforceable.

Oral Contracts

Agreements made verbally rather than in written form, which can be legally binding under certain conditions.

Memorandum

A written document or note that serves as a means of communication or a record of information.

Sale of Goods

A commercial transaction in which a seller transfers ownership of tangible personal property to a buyer for a price.