Figure 34-2. Suppose That Banks Are Less Able to Raise Funds and Raise

question 33

Multiple Choice

Figure 34-2.
Suppose that banks are less able to raise funds and so lend less. Consequently, because people and households are less able to borrow, they spend less at any given price level than they would otherwise. The crisis is persistent so lending should remain depressed for some time.
-Refer to Figure 34-2.The appearance of the long-run aggregate-supply (LRAS) curve

• A)is inconsistent with the concept of monetary neutrality.
• B)is consistent with the idea that point A represents a long-run equilibrium but not a short-run equilibrium when the relevant short-run aggregate-supply curve is AS₁.
• C)indicates that Y₁ is the natural rate of output.
• D)All of the above are correct.

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Definitions:

Statistical Technique

A method or procedure used in the analysis of data to uncover patterns, trends, or relationships.

Subjects

Individuals or entities being studied or observed in an experiment or study.

Dependent Means

Dependent means refer to statistical analyses concerning means from related or paired samples, where the observation in one sample is influenced by or paired with the other.

Sample

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