According to AD-AS model, the primary long-run effect of increases in the money supply is

A) higher price level.
B) higher GDP.
C) lower price level.
D) lower GDP.


A

Economics

You might also like to view...

A competitive equilibrium is a state of affairs in which

A) markets clear, and output is maximized. B) output is maximized, and all agents are equally well-off. C) all agents are equally well-off and agents are price-takers. D) economic agents are price takers and markets clear.

Economics

A currency union would be beneficial to nations with symmetrical demand shocks so that a coordinated monetary policy is possible. Comparing the Eurozone with the United States, the finding is:

A) the Eurozone nations and the U.S. states are markedly different in the correlation between growth rates of GDP. B) the Eurozone nations and the U.S. states are quite similar in terms of correlation between growth rates of GDP. C) the Eurozone nations have higher growth rates of GDP in their member states, whereas the United States exhibits lower growth rates. D) the Eurozone is much more diverse in terms of its growth in GDP.

Economics

Which of the following statements describes the way our home equilibrium reflects the concepts of competitive markets?

I. The opportunity cost of each good is the inverse of the ratio of labor productivity. II. Prices of each good reflect opportunity cost. III. Wages are equal and reflect the value of the marginal product of labor (MPL × P) for each good. a. I b. II c. III d. I, II, and III

Economics

What is an overvalued exchange rate? What factors may cause a country's currency to become overvalued?

What will be an ideal response?

Economics