In the long run, an expansionary monetary policy will lead to:
a. a decrease in aggregate expenditure.
b. an increase in unemployment
c. an increase in the price level.
d. an increase in potential output.
e. a decrease in the price level.
c
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Free trade refers to the ability:
A) of the developing countries to make payments for imports of goods at the end of every year. B) to trade without hindrance or encouragement from the government. C) of the developed countries to set the world prices of most goods and services. D) of the developed countries to provide financial aid to the developing nations.
What are the major economic effects of rent ceilings?
What will be an ideal response?
Which of the following is the outcome of the lemons problem in the used-car market?
A) Only low-quality cars will be traded in the market. B) Only high-quality cars will be traded in the market. C) Both low-quality and high-quality cars will be traded in the market. D) No cars will be traded in the market.
Economic efficiency
a. should be society's main goal b. means that no Pareto improvements are possible c. cannot coexist with Pareto efficiency d. requires that income be distributed fairly e. implies that goods can be reallocated in a way that benefits someone