Suppose the price of crude oil increases and we produce just enough crude oil for our own consumption. On impact, our will shift upward and T will be than our target n*. If our central bank wants to keep the same Tt*, it has to interest rates. AST lower; raise O b. ASTt higher; cut O c ADTT lower; cut O d. ASt higher; raise

Suppose there is a simultaneous fiscal expansion and monetary contraction. We know with certainty that: Select one: O O O O O a. output will increase. b. output will decrease. c. the interest rate will increase. d. the interest rate will decrease. e. both output and the interest rate will increase.

The diagrams show the monetary equilibrium and the demand for investment. The economy begins with money supply Ms, money demand Mp, and investment demand ID. The interest rate is in and desired investment is lo. Interest Rate % O A. interest rates will fall and the quantity of desired investment expenditure will fall. O B. interest rates will rise and the quantity of desired investr expenditure will fall. C. interest rates will rise and the quantity of desired investment expenditure will rise. O D. interest rates will fall and the quantity of desired investment expenditure will rise. 00 .O Ms a. Beginning at the initial equilibrium, suppose the Bank of Canada increases the money supply. In this case, Quantity of Money Mp Interest Rate % Desired Investment Q

4. Carefully understand and analyze the following scenario. Mask mandates are lifted recently and consumers are optimistic in the current environment. What would be the short and long run impact of improved consumers’ confidence in coming months assuming the economic is in no gap situation currently?