If the Economy Is in a Long-Run Equilibrium When the Federal

question 26

Multiple Choice

If the economy is in a long-run equilibrium when the Federal Reserve decides that its inflation target is too low and chooses to raise it,________.

• A)it would conduct monetary policy consistent with a downward shift of the MP curve
• B)it would conduct monetary policy that would lead to a rightward shift of the AD curve
• C)after an easing of monetary policy,an eventual decrease in short-run AS would drive the long-run equilibrium level of inflation up
• D)all of the above
• E)none of the above

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Definitions:

Profitability Strategy

A business approach focused on increasing net income through revenue enhancement, cost reduction, or both.

Breakeven Analysis

A financial calculation to determine the point at which revenue received equals the costs associated with receiving the revenue, thus no net loss or gain is incurred.

Company's Costs

Company's costs refer to the various expenses a company incurs in its operations, including production, marketing, and administrative expenses.

Level of Sales

This term refers to the total volume or value of sales achieved by a company, product, or service over a specific period, indicating its market performance.