Question

19) The aggregate supply curve for the long run is:

Potential output for the economy.

the full employment aggregate supply curve.

Represents potential output, full employment output and is a vertical line.

a vertical line when output is plotted against the price level.

21) When the Federal Reserve rescued Bear Stearns in March 2008 to avoid the banking crisis, the Fed was accused of engaging in

Lender of last resort.

Regulating the bank

Moral suasion

Moral hazard

22) All of the following are causes of Great Recession except

Consumer’s pessimism

Falling Global growth

Falling house prices

Increased Imports

Answer 1

19) The long-run aggregate supply curve represents potential output at full employment is a vertical line.

the correct option is (c)

20) when Fed rescued Bear Stearns to avoid a banking crisis, the Fed was accused of being the lender of the last resort to avoid the dread of the recession in the economy.

the correct option is (a)

21) Causes of the recession are pessimistic views of consumers lower their demand on spending, falling growth at a global level and increase in imports which reduce aggregate demand are all indicators of recession except fall in the housing price.

the correct option is (c)