According to the simple quantity theory of money in the AD-AS framework, when the money supply increases, the result is __________ in Real GDP and __________ in the price level
A) no change; no change
B) a rise; no change
C) no change; a rise
D) a rise; a fall
E) a fall; a rise
C
You might also like to view...
A permanent decrease in demand definitely
A) shifts a firm's average total cost curve downward. B) creates diseconomies for individual firms. C) lowers the market price. D) decreases the number of firms in the industry. E) shifts a firm's average total cost curve upward.
The decreasing portion of a firm's long run average cost curve is attributable to:
a. diminishing returns to scale. b. increasing marginal cost. c. economies of scale. d. diseconomies of scale. e. constant returns to scale.
The personal income tax is the single largest source of revenue for the federal government
a. True b. False Indicate whether the statement is true or false
Suppose that country A pegs its currency to that of country B. Now suppose that there is an adverse demand shock in country A. Country B is more likely to cooperate and increase its money supply in response to country A's adverse demand shock when:
A) country B's output is below its preferred level. B) country B is experiencing high rates of inflation. C) country B wants country A to devalue its currency. D) country A is experiencing high rates of inflation.