Suppose the Economy Is Initially in Long-Run and Short-Run Equilibrium

question 27

Multiple Choice

Suppose the economy is initially in long-run and short-run equilibrium. If the Fed decides to pursue a contractionary monetary policy, we will see

• A) bond prices fall, interest rates fall, aggregate demand remains unchanged as consumption spending decreases, but investment spending increases. GDP remains constant in both the short run and the long run, but the price level falls in both.
• B) bond prices fall, interest rates rise, aggregate demand falls as investment and consumption spending decrease, and real GDP and the price level decreasing in the short-run, but only the price level decreasing in the long run.
• C) bond prices fall, interest rates rise, aggregate demand falls as investment spending decreases and consumption spending remains unchanged, and real GDP and the price level decrease in the short run, but only the price level falls in the short run.
• D) interest rates rise but no change in bond prices. Aggregate demand falls as consumption spending and investment spending decrease, and the price level and real GDP fall in both the short run and the long run.

Recognize the roles and responsibilities of individuals in preventing and reporting insider trading.

Distinguish between tipper and tippee liability within the context of securities trading.

Understand the concept of securities fraud and the various defenses that can be deployed against such accusations.

Comprehend the legal requirements for the sale and registration of securities, including exemptions for private placements.

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Definitions:

Post-secondary

Pertaining to education beyond high school, including programs at colleges, universities, and vocational schools.

Marginalized Voices

Refers to groups or individuals whose experiences, stories, and perspectives are often overlooked or silenced in society's dominant narratives.

Social Theory

A system of ideas that attempts to explain how societies operate, evolve, and are structured.

Functional Imperatives

Fundamental prerequisites or necessary conditions that must be met for a system or organization to survive, function, and thrive.